Published: Friday, May 17, 2013

Politics to figure high in budget

Former caretaker adviser says at discussion organised by ICAB, Prothom Alo

The budget for fiscal 2013-14, which comes ahead of the national election, is likely to be governed by political motives, a noted economist said yesterday.
“The economy will take a backseat in the budget to be placed in parliament early next month. Politics will get priority,” said Akbar Ali Khan, former adviser to a caretaker government.
“We can guess what we will have in the budget, but we do not know the fate of Bangladesh in 2014.”
Khan’s comments came at a pre-budget discussion co-organised by the Institute of Chartered Accountants of Bangladesh (ICAB) and Prothom Alo, the country’s top-selling newspaper.
He said the budget has become a political instrument for the incumbent party. “We have to come out of this tendency, but it’s not so easy and will take time to do so.”
Referring to the lack of transparency in the budget, Khan said: “There is no democracy inside political parties. The parties are run by figureheads, and no-one can raise any question.”
“If democracy was practised among the political parties, we could have known everything and transparency could have been ensured.”
He said Bangladesh follows the “Westminster style of budgeting” like England, India, Australia and Canada, which needs to be amended.
“But those countries have brought many changes to their methodology for budget formulation and implementation. Bangladesh is more than 40 years old, with no changes to be made yet.”
The former caretaker government adviser said there is a lack of “financial significance” in the budget.
“Whatever proposals on tax or revenue or other matters are made, the possible impact by numbers are not given. So, it is not possible even for a pundit to analyse the financial significance of the budget.”
“In one way we are talking about the market economy, and on the other way we are also talking about the planned economy. But there is no sign of coordination between the two types of economy, even we don’t know in which way we are going.”
Other discussants at the programme urged the government not to allow amnesty for black money anymore, as the provision is unethical, unfair to genuine taxpayers and encouraging of corruption.
They also requested the government to ensure tax collection from large taxpayers or industries instead of increasing the tax burden on individuals.
Specifically, they suggested increasing the ceiling of tax-free income to Tk 3 lakh, implementation of annual development programme within the fiscal year, reducing corporate tax for financial institutions including banks, non-banks and insurance companies and increasing the ceiling of tax-free dividend income to Tk 20,000.
Abdul Majid, a former chairman of the National Board of Revenue, suggested starting the fiscal year from March or April, instead of June, in line with the country’s crop season and to avoid the rainy season.
Citing the Indian fiscal year starting April 1, he said: “When the fiscal year starts in our country, 2-3 months go to waste due to rainy season and no development works could be started.”
Iftekharuzzaman, executive director of Transparency International Bangladesh, said although the country has a good position in the world’s “open budget index”, the rank can be better with more transparency and accountability in formulating and implementing the budget.
“The defence budget still remains a grey area. We never know for which purpose or in which segment the defence budget is being used.”
Faruq Ahmad Siddiqi, former chairman of Bangladesh Securities and Exchange Commission, said, in comparison to the GDP size, the tax ratio is frustrating.
“At the rate our GDP is growing, the tax payers are not increasing in line with the pace.”
Humayun Kabir, former president of ICAB, moderated the discussion, also attended by Matiur Rahman, editor of Prothom Alo, Abdul Qayyum, associate editor of the newspaper, and Abdus Salam, president of ICAB.