Higher revenue generation from direct taxes to tackle dangerous-looking income inequality should get top priority in the upcoming national budget.
Speakers in a pre-budget discussion on Sunday in the capital also said that checking inflation as well as capital flight should also get a focus from finance minister Abul Hassan Mahmood Ali in his first budget to be announced in June.
Upholding institutional responsibility to ensure good governance and check corruption is not less important, said the speakers while describing the flawed policies persuaded over the past two years that led to the current macroeconomic predicaments affecting the economy badly.
The Centre for Policy Dialogue distinguished fellow Mustafizur Rahman blamed the government鈥檚 failure to generate higher revenue from direct taxes for high income inequality, reaching 0.49 in the Gini Coefficient in 2022.
The income redistribution model, through property tax and inherent tax, is completely missing, he said.
Former finance secretary Mahbub Ahmed said that growth-centric policies had been given priority over the past one and a half decades, despite income inequality reaching an alarming stage.
Income redistribution, health, education, and agriculture should be given priority in the new budget, he said, adding that revenue generation through direct tax was imperative to face the change of graduation from least developed countries in 2026.
The Economic Reporters鈥� Forum arranged the discussion at its office.
The state minister for finance, Waseqa Ayesha Khan, said that initiatives had been taken to enhance revenue from Value Added Tax to meet the challenges of revenue generation.
The automation process of the tax admonition and better coordination with Bangladesh Bank and other agencies were going on as part of checking tax dodging and corruption, she said, while recalling zero tolerance of the government for corruption.
She said that inflation was a common global phenomenon while referring to 65 per cent inflation in Turkey.
Speakers said that better coordination between fiscal and monetary policy and the right policy was also important to tackle both external and internal shocks.
Blaming the 9/6 interest policy and delayed depreciation of the local currency, they lamented that, after high growth and low inflation, the country was now facing low growth and high inflation.
Focusing on the proposed merger in the banking sector, the speakers said that transparency should be maintained properly.
Bangladesh Garment Manufacturers and Exporters Association director Shams Mahmud said that directors responsible for making banks sick should be brought to book.
He also said the period for implementing recommendations from the International Monetary Fund was not sufficient.
BGMEA鈥檚 former president Anwar-ul Alam Chowdhury expressed concern over the reduction of export incentives and demanded government intervention to correct the data on export incomes.
He lamented that apprehension among the common people about capital fights by businessmen was growing because of differences in export incomes reordered by the BB, Customs, and Export Promotion Bureau.
