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Make taxation progressive, easier to reduce inequality

Experts suggest at dialogue

FE Report | December 24, 2018 00:00:00

Experts at a dialogue on Sunday called for making the country's taxation system progressive as they dubbed the existing one non-progressive that imposes huge indirect taxes on the poor.

The commoners have to pay huge money as indirect taxes, they said at a dialogue on 'Progressive Taxation to Reduce Inequality' at the CIRDAP auditorium in the capital.

Sushasoner Jonny Procharavizan (SUPRO) - Campaign for Good Governance - in association with OXFAM in Bangladesh organised the event.

SUPRO organised a number of consultation meetings on budgetary process and tax justice issues at the grassroots level in 10 districts of Bangladesh in the last two months. The dialogue was organised to disseminate the recommendations made in those meetings.

SUPRO Vice Chairperson Monju Rani Pramanik presented the keynote paper.

Referring to a survey conducted by the BBS in 2016, the paper said that the wealth of the top five richest people grew by 27.9 per cent while that of the poorest ones rose by 0.23 per cent only.

"It proves the higher GDP growth rate achieved by the country in recent years is failing to reduce the wealth inequality," the paper said, adding that the taxation system is non-progressive as commoners have to pay huge money as indirect taxes.

Speakers at the dialogue suggested a series of measures including introduction of a balanced taxation system, its digitalisation and increasing direct tax methods to make the taxation more effective and purposeful.

The steps also include an easier return submission system for the lower-income group and ensuring transparency at tax offices through adoption of modern financial technologies, a platform of non-government organisations (NGO).

Former Governor of Bangladesh Bank Dr Atiur Rahman attended the dialogue as the chief guest, while SUPRO Chairperson SM Harun Or Rashid Lal presided over the programme.

Legal Economist M S Siddiqui and OXFAM's Policy, Advocacy, Campaign and Communications Manager S M Monjur Rashid were present as the special guests.

Dr Atiur Rahman said the tax administration can follow the success of the country's banking sector in terms of technology adoption.

Despite several scams in recent years, Bangladesh's banking sector has achieved a considerable progress in adopting digitalisation and new technologies, showing a pathway to financial inclusion, he noted.

"Taxmen can follow such strategies to simplify the taxation system and widen the tax net," he said.

Referring to the growing success of mobile financial services (MFS) and Agent Banking for financial inclusion in the country, he said that taxation can be made easier with such facilities.

The former central banker underscored the need for knowledge and research-based policy making to turn the taxation more just and purposeful.

In his speech, M S Siddiqui laid emphasis on transparency in budget implementation with the money collected from the people.

He said the commoners would enjoy more subsidised rates for fuel oil had there been enough transparency.

OXFAM's Monjur Rashid said large corporations often reportedly dodge taxes by various means.

"To ensure tax justice, the government must recover 100 per cent of tax imposed on the large corporate taxpayers," he said.

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