Dr Shamsul Alam told a budget talk in Dhaka that US$7.0 to 8.0 billion worth of the funds are laundered annually.
"Dollar crisis started from money laundering. Therefore, measures to prevent it are urgently needed," he said.
The observations were made during a seminar titled 'Bangladesh Economy in the Global Perspective: National Budget 2024-2025 for Growth, Inflation, Food and Nutrition Security,' organised by Bangladesh Agricultural Economists Association jointly with the FAO at the Bangladesh Agricultural Research Council (BARC) Auditorium in the city.
Lawmaker Shazzadul Hasan chaired the meet while Finance Minister Abul Hasan Mahmud Ali, State Minister for Commerce Ahsanul Haque Titu, and FAO Representative Dr Jiaqun Shi also spoke.
The Finance Minister said there is still chance to bring a revision in the proposed budget and the government will consider it following logical observations.
Ahsanul Haque Titu said the government had to spend additional $14 billion on imports of fuels, food and fertilisers which also caused the dollar crisis.
He said the ministry is working to make 10,000 permanent dealer points for people who buy essential commodities at subsidised rates from the Trading Corporation of Bangladesh (TCB).
"We have also plans to sell some other products at fair rates apart from the subsidised sale of fixed products," he told the function.
Titu also pointed out that the country has foreign reserves sufficient for three months.
"While this is adequate, it would be preferable to have reserves covering five to ten months," he said.
Dr Shamsul Alam further said official figure for default loans is 9.0 per cent.
"But 22 per cent of the loans are now risky, which should be taken into consideration."
A bank commission, or at least a strong committee, should be formed with experts for a logical solution for the financial sector, he proposed.
He also proposed appointment of Tax Ombudsman and also opined for specifying functions of NBR and IRD regarding the tax-related formalities. Implementation of ADP should also be given utmost importance.
He thinks syndicate emerges whenever there is scarcity for a specific product in the market. "So, import should be eased to take control over inflation as well as over any syndicate."
FAO representative Dr Shi notes that Bangladeshi agriculture has achieved exemplary development in-between 2005 and 2019.
The country is going to graduate from LDC status in 2026, to be a middle- income by 2031 and it has target to become a developed nation by 2041. "The government of the Bangladesh has been appropriating its policies following those targets."
He said allocation for agriculture might have increased in absolute value in the budget but, considering the inflation for last one year, it was reduced in real terms.
He said Bangladesh's 85 per cent of poor reside in villages. The government should take initiatives to generate employment and income for bringing enhancement in their livelihoods.
Prof Dr Jahangir Alam of Bangladesh Agricultural University presented the keynote which says the budget has deduced tax rates for publicly traded companies to 25 per cent from 27.5 per cent, one- person companies to 20 from 22.5 and newly listed companies via IPO to 20 per cent from 22.5 per cent.
The paper also reads the budgetary allocation for the farm sector has been proposed for 5.9 per cent in FY'25 from 5.7 per cent in the outgoing FY.
Import duties on necessary production materials, machinery and farm inputs have also been reduced, says the paper.
Dr Shamsul Alam said reduction in corporate and other taxes, raising allocation for farm sector, cutting duties on machinery, inputs and other materials might help reduce inflation as prices of commodities and products will be reduced by the companies following tax benefits.
He also said the removal of interest cap might also help control inflation by bringing a hold over the money market.
He said deposits are also on a rising trend followed by a surge in yield rates which is "a good sign".
But the current interest rate (loan) which has already reached 14-15 per cent should not be increased further, he said.
"If it increases further, it could even discourage medium or small industries from making investment which is mandatory for exploring employment and boosting economic growth," he said.
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