Budget and the retired people
Tuesday, 22 June 2010
Mabbubul Haque Chowdhury
The Finance Minister has presented a very big and ambitious budget for the fiscal 2010-11. In the 2009-10 fiscal too, a similar big budget was presented. All know that the current budget has failed to produce the desired results. The prices of essentials could not be contained. The rate of inflation could not also be contained. Employment generation was poor as development work faltered. The so-called concept of Public Private Partnership (PPP) remained on the drawing board. Foreign employment came down.
We are always talking about big amount of foreign remittance. The increased flow of foreign remittance may have been due to the opening of many exchange houses abroad and quick service of the agencies. These monies are being bought by the banks from the expatriates and subsequently are being sold to the central bank. The central bank has got a duty to utilise the fund judiciously instead of keeping it in the vault.
The estimated growth of gross domestic products (GDP) could not be achieved. Remittance from traditional import/exports has declined in comparison with other years. Foreign direct investment (FDI) has not come as expected. Even the local entrepreneurs have not set up any big industries during the year. The only success was in the agricultural sector. The overall performances of 2010 fiscal is bad.
The proposed budget for the next fiscal, presented with the help of power point (a digital device), could not be understood by many. Hundreds of direct and indirect taxes and VAT have been proposed. The advance income tax has been proposed for many importable items. Again, VAT would have be paid on the imported goods on which advance income tax would be paid at the finished level. The consumers or users would have to bear the burden of extra tax.
Saving plays a vital role in every economy. Investment largely depends on the size of savings. A poor country like ours cannot afford to save much as most of the people do not have any surplus money to save. It is only the service-holders, small businessmen and middle income group who save for the rainy days. The people prefer to save in a safe place. Banks and financial institutions, though are right places to keep deposits, do not usually offer government rate of profit. The government floats bonds, Sanchaya Patra's and treasury bills to collect money to finance development work. The general public prefer to buy Sanchaya Patra's due to security reasons. The rate of profit offered is also attractive. The government has decided to impose income tax on the earnings of the deposited money.
Bangladesh is not a welfare state. Of late it has, however, started paying Tk 200/300 to a limited number of vulnerable people living in the rural areas. The retired persons, who have no source of income other than a small amount of pension money, buy Sanchaya Patra to somehow manage their family budget. How can these people holding Sanchaya Patra, worth a small amount, be taxed while only those people whose income exceed Tk 1,65,000.00 fall in the category of income tax payee?
The Finance Minister has presented a very big and ambitious budget for the fiscal 2010-11. In the 2009-10 fiscal too, a similar big budget was presented. All know that the current budget has failed to produce the desired results. The prices of essentials could not be contained. The rate of inflation could not also be contained. Employment generation was poor as development work faltered. The so-called concept of Public Private Partnership (PPP) remained on the drawing board. Foreign employment came down.
We are always talking about big amount of foreign remittance. The increased flow of foreign remittance may have been due to the opening of many exchange houses abroad and quick service of the agencies. These monies are being bought by the banks from the expatriates and subsequently are being sold to the central bank. The central bank has got a duty to utilise the fund judiciously instead of keeping it in the vault.
The estimated growth of gross domestic products (GDP) could not be achieved. Remittance from traditional import/exports has declined in comparison with other years. Foreign direct investment (FDI) has not come as expected. Even the local entrepreneurs have not set up any big industries during the year. The only success was in the agricultural sector. The overall performances of 2010 fiscal is bad.
The proposed budget for the next fiscal, presented with the help of power point (a digital device), could not be understood by many. Hundreds of direct and indirect taxes and VAT have been proposed. The advance income tax has been proposed for many importable items. Again, VAT would have be paid on the imported goods on which advance income tax would be paid at the finished level. The consumers or users would have to bear the burden of extra tax.
Saving plays a vital role in every economy. Investment largely depends on the size of savings. A poor country like ours cannot afford to save much as most of the people do not have any surplus money to save. It is only the service-holders, small businessmen and middle income group who save for the rainy days. The people prefer to save in a safe place. Banks and financial institutions, though are right places to keep deposits, do not usually offer government rate of profit. The government floats bonds, Sanchaya Patra's and treasury bills to collect money to finance development work. The general public prefer to buy Sanchaya Patra's due to security reasons. The rate of profit offered is also attractive. The government has decided to impose income tax on the earnings of the deposited money.
Bangladesh is not a welfare state. Of late it has, however, started paying Tk 200/300 to a limited number of vulnerable people living in the rural areas. The retired persons, who have no source of income other than a small amount of pension money, buy Sanchaya Patra to somehow manage their family budget. How can these people holding Sanchaya Patra, worth a small amount, be taxed while only those people whose income exceed Tk 1,65,000.00 fall in the category of income tax payee?