Finance Minister AMA Muhith has hinted imposition of property tax from the next fiscal year (FY), 2015-16, instead of the existing wealth tax, known as surcharge, after observing that the measure is not working as expected.
He termed the surcharge as 'distorted tax' and asked the revenue board chief to consider imposing property tax in the next budget instead of the wealth tax.
"Adequate work has not been done on the wealth tax. The next budget should at least begin the property tax," he said.
The finance minister made the comments at a pre-budget meeting with the Economic Reporters Forum (ERF) at the Finance Division under the Ministry of Finance on Wednesday.
On corporate tax, he said a review is needed in the corporate tax rates, as tax burden is reduced drastically for companies after they get listed in the stock market.
"The corporate tax rates should be rationalised to make it logical," he said.
On budget allocation for construction of new roads, the finance minister said the government has decided to develop and maintain the existing roads instead of building new ones.
"No new road is required, as there are sufficient roads in the country," he said.
Mr Muhith expressed his confidence over achieving close to seven per cent Gross Domestic product (GDP) growth in the current fiscal, terming the economic losses for the political turmoil in January as 'minimal'. "We feared an adverse impact of the political movement, but it did not happen. The impact was only for one month."
For next FY, the GDP target may be increased by some 0.2 to 0.3 per cent, he said.
In the next budget, power and transportation sector will continue to get high attention, but focus may also be given to human resources development, the minister added.
On the VAT law, he said the law implementation plan is now at the final stage. "It will come into effect from July 1, 2016. We have kept adequate margin for the law."
On Public-Private Partnership (PPP), the finance minister said the budget may have some measures to encourage PPP.
Economic Relations Division (ERD) senior secretary Mohammad Mejbahuddin said there is some US$ 18 billion foreign aid in the pipeline, which will be utilised gradually by enhancing capacities.
Banking and Financial Institution Division secretary Dr M Aslam Alam said the state-owned banks will be brought under automation by 2016.
He said the reform initiatives are going on in the banks, including strengthening enterprises, resource planning, and internal control and compliance. Corporate governance of the banks and reconstruction of their boards are also included in the reform plan.
On the Insurance Development and Regulatory Authority (IDRA), he said the new organisation is yet to have its required manpower.
"The audit of IDRA is going on that will include its last four years' activities," he added.
National Board of Revenue (NBR) chairman Nojibur Rahman said tax revenue target in the next budget will be Tk 1.76 trillion.
"Apparently it seems a large amount. But when the target will be achieved, it may not be seen as ambitious."
He said the government has launched a massive awareness programme with the businesses and chambers on the new VAT law.
At the programme the ERF president, secretary general and other members made their respective proposals for inclusion in the next budget.
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