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Speakers: Need for framing pandemic-focused budget for FY22

  • Published at 03:03 pm May 4th, 2021
ERF webinar 2021
Economists and business leaders address a virtual pre-budget discussion organized by Institute of Chartered Accountants of Bangladesh (ICAB) and the Economic Reporters' Forum (ERF) on Tuesday, May 4, 2021 Courtesy

They also emphasized strengthening the ongoing vaccination program, carrying on necessary tax reforms as well as reducing the corporate tax rates

Economists and business leaders at a webinar on Tuesday stressed the need for framing a budget for the next fiscal year (FY22) focused on the Covid-19 pandemic, prioritizing the health sector to mitigate the health-related risks, alongside sound macroeconomic management, widening social safety nets, raising the tax-GDP ratio and generating more employments.

They also emphasized strengthening the ongoing vaccination program, carrying on necessary tax reforms as well as reducing the corporate tax rates, ensuring proper budget implementation and quality spending of development projects, addressing the livelihood issues in the context of pandemic, prioritizing the CMSMEs and bringing the education sector under the purview of the stimulus packages.

Leading economists, professionals, business leaders, and civil society representatives gave their recommendations at a webinar titled "Macroeconomy: Expectations from National Budget 2021-22". 

Institute of Chartered Accountants of Bangladesh (ICAB) and the Economic Reporters' Forum (ERF) jointly organized the webinar.

Prime Minister's Economic Affairs Adviser Mashiur Rahman spoke at the webinar as the chief guest.

Stressing the need for carrying out necessary reforms in the financial sector and in the revenue sector, Mashiur said that reforms in the capital and bond markets are also necessary to attract large-scale investors.

The adviser noted that if the lion's share of deficit financing could be made available from the foreign sources, then its impact in the domestic sector would be not that much.

Mashiur also stressed the need for boosting confidence among the businesses and investors, attracting more FDI, ensuring skills development and sound basic education up to secondary level.

Rasheda K Chowdhury said that the upcoming budget should be a pandemic-focused one while the education sector should be brought under the stimulus package as the losses to this sector is huge and it is invisible.

Also Read - BUDGET FY 2021-22: Garment accessories producers demand lower source, corporate taxes

Executive director of Policy Research Institute (PRI) Ahsan H Mansur proposed for allocating Tk15,000 crore for vaccination in the next budget and that fund should be made available from day one.

For the new poor being created from the impacts of the pandemic, he said only cash support is not enough for them, rather some permanent measures should be taken for them.

The renowned economist also suggested addressing the livelihood issue due to the pandemic, prioritizing the SMEs in the stimulus packages, focusing more on expenditure and thus opined that the budget deficit could be stretched from 7% to 8%.

Distinguished fellow of the Centre for Policy Dialogue (CPD) Prof Mustafizur Rahman put emphasis on generating more employments, giving relief to the import substitute Industries through taxation, revisiting the import regulations, enhancing quality expenditure, and ensuring necessary reforms.

He was also critical about the scope for whitening undisclosed money in the budget, saying it is an injustice to the honest taxpayers.

BGMEA President Faruque Hassan urged the government to provide policy support to the affected industries until the crisis ends so that those could make a turnaround.

He also demanded to keep the tax rates stable for 10 years, or at least for five years, for turnaround of the industries.

MCCI President Barrister Nihad Kabir put utmost priority on ensuring qualitative spending of development projects through real time basis monitoring and evaluation by the IMED, raising the tax-GDP ratio, giving policy support to CMSMEs, and to check the trend of dodging tax, as well as laundering of money abroad.

DCCI President Rizwan Rahman suggested reducing the corporate tax rate progressively by 2.5% in the next three years and thus bring it at 25% to facilitate the businesses.

Coming down heavily on the scope for whitening undisclosed money, he said that the business community would not accept such provision for whitening the money coming from 'burglary'. Otherwise, the honest businesses will not feel encouraged to pay tax from the next year, he added.

Also Read - BUDGET FY 2021-22: Garment accessories producers demand lower source, corporate taxes

Abul Kasem Khan of BUILD suggested the continuation of the stimulus packages in the next budget as well as rationalizing taxation measures and improving the investment climate.

BASIS President Syed Almas Kabir suggested keeping the digital transaction out of the purview of VAT for the next 3 to 5 years to facilitate online transaction and wider materialization of the 'Digital Bangladesh' initiative.

Masrur Reaz, founder and chairman of Policy Exchange of Bangladesh, suggested bringing around 50% of the country's population under the vaccination program in the next one year, otherwise the revival initiatives and recovery would be much tougher.

He also proposed for allocating 1% of GDP as a social safety net for the poor as well as awarding another stimulus for the SMEs, especially for the small and micro entrepreneurs.

Naznin Ahmed, senior research fellow at BIDS, strongly advocated for reducing the corporate tax rate, prioritizing those development projects which are nearing completion, keeping budgetary allocation on creating health awareness as well as on health disaster management, making cheaper the internet facilities and also making available the gadgets for the poor students.

Sanem Executive Director Prof Selim Raihan called for expanding economic operations and growth, not having an obsessed mindset on growth, rolling out social safety net schemes for the urban poor, boosting business confidence through necessary measures, increasing budget implementation and ensuring some visible reforms.

ICAB President Mahmudul Hasan Khusru chaired the webinar while its past president Md Humayun Kabir moderated the webinar. ERF President Sharmin Rinvy made the opening remarks while its general secretary SM Rashidul Islam gave the vote of thanks.

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