FE Report
Finance Minister AMA Muhith sounded an upbeat note on higher implementation of the current annual development programme (ADP) and cited three boosters, while he appeared a bit downbeat over revenue receipts.
On matter of revenue collection, he was bitterly critical of the business community for forcing the government to withhold a new VAT law as the deferment took a toll on the tax collection.
The three reasons the finance minister attributed to better performance in the development-budget execution are: quicker approval for schemes by the Executive Committee of the National Economic Council (ECNEC), Planning Commission's endeavour to remove impediments, and a usual annual improvement in performance.
"The reason is (quick) approval of schemes. You can't spend any single penny even after purchase proposal is approved. You need ECNEC approval. Each week we hold an ECNEC meeting. That is one reason for good performance (in ADP implementation)," he said while briefing newsmen after a meeting with members of BCS Customs and & VAT and Taxes Association at his secretariat office.
The minister, elaborating on other reasons, said last time he asked the Planning Commission to give better effort in project implementation instead of always asking for increased allocation.
This year the Planning Commission is trying to overcome the impediments and that's why the rate of implementation increased, he said.
Mr Muhith also said every year there is a usual improvement in project-implementation performance. This year that also helped in attaining progress in this field.
Data show that during the July-February period of current fiscal year, the ADP implementation rose by 35 per cent compared to the corresponding period of last fiscal.
In fiscal budget for 2017-18 the ADP allocation was Tk 1.64 trillion which last Tuesday the government downsized to Tk 1.57 trillion, following reported lower revenue collection.
Regarding the state of revenue collection, the minister said the collection may be lower by 11 per cent to 12 per cent than the target set in the budget.
He said various reasons are there for the lower collection but he was hopeful that the receipts would pick up soon.
Replying to another query, the minister said the pace of implementation of the current fiscal budget was very good and the rate this year will be nearly 93 per cent or more.
"Though the initial calculation said the budget-implementation rate may go down, but I don't see any grounds for thinking it should be bad," said Mr Muhith, who now prepares for authoring the last budget of the current government, as next general election is due by December-January.
The fiscal budget of Tk 4.002 trillion was trimmed down to Tk 3.85 trillion recently, "but I think it will be further better," said the finance minister.
Replying to a query regarding new VAT (value-added tax) law implementation, he came down heavily on the country's business community as they "do not want to pay tax".
When his attention was drawn to the fact that businessmen say the new VAT law would not be implemented, Mr Muhith said: "No, it is their (businessmen) contention. They don't want to pay (taxes). That's simple truth."
He said in most countries nobody wants to pay money from their own pocket. "But in our country greediness is high...they want to do business sans paying any tax."
The minister said the new VAT law set one uniform rate--15 per cent. But the government will revise it into two to three rates to be implemented in 2019-2020.
Mr Muhtih said the government will import 50,000 pieces of electronic cash register (ECR) and distribute the machines among the VAT-payers. Businessmen who will install ECR machines in their establishments will get 2.0 percent VAT rebate.
"Once the ECR machines are installed, avoiding paying VAT will be difficult," he noted.
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