Muhith hints at tax revision on savings tools
Sunday, 20 June 2010
FE Report
Finance Minister AMA Muhith hinted Saturday of reviewing tax measures on savings instruments for next fiscal 2010-11 amid criticism by economists.
"I will see what we can do it," said the minister in a positive note at a dialogue on the "State of the Bangladesh Economy and Budget Responses 2010-11" organised by the Centre for Policy Dialogue (CPD) at a city hotel.
The minister in his June 10 budget speech proposed for imposition of 10 per cent tax on the earnings of savings instruments for the next fiscal.
He, however, turned down requests of lowering taxes on realtors saying, "I don't think the new tax is a heavy burden."
The minister has proposed Tk 2,000 per square metre tax on real estate developers for apartments and buildings in some posh areas in capital and in port city of Chittagong, while Tk 800 per square metre in other areas of the country.
"Under the new measure tax would be only Tk 200 per square feet in improved areas and Tk 80 in other areas," the finance minister spelled out.
Chaired by renowned economist Rehman Sobhan, Prime Minister's Adviser on Economic Affairs Dr. Mashiur Rahman addressed as special guest, while former advisers to the caretaker government Dr AB Mirza Azizul Islam and Wahiduddin Mahmud as guests of honour.
CPD executive director Dr. Mustafizur Rahman made the key note presentation.
Speaking on the occasion the finance minister said that the industrial policy might be finalised and a public discussion on the draft of next 5-year plan might be held next month to boost countrywide economic growth.
He also reiterated the government's stand to boost agriculture, information and communication technology (ICT) and power and energy sectors.
"Don't look at the allocations," he said adding, "We would meet whatever demands are there."
Muhith, however, termed financing in power and energy sectors as a major challenge next year.
"We have to depend largely on public-private-partnership (PPP) and private investments," he said.
The finance minister was also critical against some entrepreneurs of rental power plants as those are not coming on stream timely.
Terming rental plants as a short term measure to quick fix nagging electricity crisis across the country, the minister said, "it has not been possible to follow tendering process to install such plants but the legal procedures are being maintained."
Necessary amendment to the relevant regulations has been made, he added.
Muhith was also optimistic on Annual Development Programme (ADP) implementation of the current fiscal saying it would be around Tk 280 billion against the revised ADP of Tk 28.5 billion.
He also said that the gender issue, poultry, jute industry, family planning, urbanization could highlighted more in the budget proposals.
Dr Mashiur Rahman said the government is serious in decentralisation and addressing regional disparity across the country.
"But it is unfortunate that experts working in this field are not coming up with any suitable solutions out of it," he added.
The 'alternative budget' placed by the opposition leader raised high hopes, he said.
But it was not placed in right place where it would have legitimacy, said the economic affairs adviser to the prime minister.
Dr AB Mirza Azizul Islam said that the electricity generation would have been more if the projects initiated during the previous caretaker government would have been monitored properly.
Lack of competence in administration, financiers' indifferences and apathy of the contractors to bring plants on time are the major challenges in power and energy sector.
Islam also suggested for a status quo on the tax measures on savings tools on pensioners.
"The government should spell out its investment plans in infrastructure, constructions and other establishments," said Prof Wahiduddin Mahmud.
He also stressed for innovative expansion of products to accelerate the growth of gross domestic product (GDP) replacing the 'replicating' expansion.
"We need to bring innovation in manpower, technology and all other potential sectors to reach the GDP growth of 7-8 per cent," said the former adviser of the caretaker government.
He said it country took a long 20 years to raise GDP growth to current average of 6.0 per cent from the average 4.0 per cent in 1990s.
"If we fail to go for innovation in fiscal management it would be difficult to accelerate growth," he added.
Former Education Minister Osman Faruq said the crisis in power and energy sector is a 'national failure.'
Finance Minister AMA Muhith hinted Saturday of reviewing tax measures on savings instruments for next fiscal 2010-11 amid criticism by economists.
"I will see what we can do it," said the minister in a positive note at a dialogue on the "State of the Bangladesh Economy and Budget Responses 2010-11" organised by the Centre for Policy Dialogue (CPD) at a city hotel.
The minister in his June 10 budget speech proposed for imposition of 10 per cent tax on the earnings of savings instruments for the next fiscal.
He, however, turned down requests of lowering taxes on realtors saying, "I don't think the new tax is a heavy burden."
The minister has proposed Tk 2,000 per square metre tax on real estate developers for apartments and buildings in some posh areas in capital and in port city of Chittagong, while Tk 800 per square metre in other areas of the country.
"Under the new measure tax would be only Tk 200 per square feet in improved areas and Tk 80 in other areas," the finance minister spelled out.
Chaired by renowned economist Rehman Sobhan, Prime Minister's Adviser on Economic Affairs Dr. Mashiur Rahman addressed as special guest, while former advisers to the caretaker government Dr AB Mirza Azizul Islam and Wahiduddin Mahmud as guests of honour.
CPD executive director Dr. Mustafizur Rahman made the key note presentation.
Speaking on the occasion the finance minister said that the industrial policy might be finalised and a public discussion on the draft of next 5-year plan might be held next month to boost countrywide economic growth.
He also reiterated the government's stand to boost agriculture, information and communication technology (ICT) and power and energy sectors.
"Don't look at the allocations," he said adding, "We would meet whatever demands are there."
Muhith, however, termed financing in power and energy sectors as a major challenge next year.
"We have to depend largely on public-private-partnership (PPP) and private investments," he said.
The finance minister was also critical against some entrepreneurs of rental power plants as those are not coming on stream timely.
Terming rental plants as a short term measure to quick fix nagging electricity crisis across the country, the minister said, "it has not been possible to follow tendering process to install such plants but the legal procedures are being maintained."
Necessary amendment to the relevant regulations has been made, he added.
Muhith was also optimistic on Annual Development Programme (ADP) implementation of the current fiscal saying it would be around Tk 280 billion against the revised ADP of Tk 28.5 billion.
He also said that the gender issue, poultry, jute industry, family planning, urbanization could highlighted more in the budget proposals.
Dr Mashiur Rahman said the government is serious in decentralisation and addressing regional disparity across the country.
"But it is unfortunate that experts working in this field are not coming up with any suitable solutions out of it," he added.
The 'alternative budget' placed by the opposition leader raised high hopes, he said.
But it was not placed in right place where it would have legitimacy, said the economic affairs adviser to the prime minister.
Dr AB Mirza Azizul Islam said that the electricity generation would have been more if the projects initiated during the previous caretaker government would have been monitored properly.
Lack of competence in administration, financiers' indifferences and apathy of the contractors to bring plants on time are the major challenges in power and energy sector.
Islam also suggested for a status quo on the tax measures on savings tools on pensioners.
"The government should spell out its investment plans in infrastructure, constructions and other establishments," said Prof Wahiduddin Mahmud.
He also stressed for innovative expansion of products to accelerate the growth of gross domestic product (GDP) replacing the 'replicating' expansion.
"We need to bring innovation in manpower, technology and all other potential sectors to reach the GDP growth of 7-8 per cent," said the former adviser of the caretaker government.
He said it country took a long 20 years to raise GDP growth to current average of 6.0 per cent from the average 4.0 per cent in 1990s.
"If we fail to go for innovation in fiscal management it would be difficult to accelerate growth," he added.
Former Education Minister Osman Faruq said the crisis in power and energy sector is a 'national failure.'