The supplimentary budget for the FY 2014-15 and proposed budget for FY 2015-16 have been placed before Parliament last week. According to the rules and procedures, the supplimentary budget will be cleared within a week after it is placed and the proposed budget will be passed by Parliament by June 30 for obtaing 'assent' of the President. Constitutionally, the budget is a document that should be recommended by the President for placing before Parliament and finally it must have his assent to become legally implementable.
In this connection the Rules of Procedure of Bangladesh Parliament (Section 123 and 124) say, 'debate on the supplementary grants shall be confined to the items constituting the same and no discussion may be raised on the original grants nor policy underlying them save in so far as it may be necessary to explain or illustrate the particular items under discussion." There is thus seldom any detailed discussion or debate on the supplementary budget in parliament. It is cleared by the legislature mostly within a week of its placement. Traditionally, in this part of the world budgets are prepared by the Ministry of Finance and passed by Parliament without rigorous scrutiny.
   The budget, apart from being a strategic plan and roadmap for development and non-development fiscal measures, is a fundamental memorandum of understanding between the citizen and the government and both are legally bound to each other for its proper implementation. Both the government and citizens are represented in Parliament by the elected representatives, so the representatives are expected to have active participation in the budget processing, passing and overseeing its implementation with due diligence.
 Bangladesh Constitution has a clear condition that "no tax shall be levied or collected except by or under the authority of an Act of Parliament." So, parliament must endorse the new issues or revisions made in the fiscal (tax policies in particular) during a financial year other than which were passed by parliament while adopting the Finance Bill.
In the proposed budget the revenue collection target has been set at over Tk 2.08 trillion (2 lakh 8 thousand 770 crore) in which the share of the National Board of Revenue (NBR) is Tk 1.76 trillion (1 lakh 76 thousand 370 crore). The revenue collection target is indeed ambitious since it is 30.62 per cent higher than that of the current financial year (2014-15). Corporate tax rates have been reduced, new tax exemptions have awarded to some sectors and minimum taxable income ceiling raised. With the new measures the NBR is faced with the strong challenge of achieving the targeted growth of 30 per cent in its revenue earning. The ratio of contribution from non-NBR revenue has been decreased enormously during the last two financial years, and the budget has given a soft target for the next year too. Non-NBR revenues will be coming from public sector corporations, service organisations and enterprises running commercially. Thus, more accountability of the financial functionaries of the state-owned enterprises (SoEs) has to be ensured. As they have eaten up most of the foreign aid for their development, they must pay back the government in terms of SLA repayment.      Â
Effective initiatives should be taken to make direct tax the principal source of revenue with a view to ensuring socio-economic development and creating a society based on equity and justice. Such initiatives are to be taken to bring a sense of reasonable equity in the overall economic landscape. In the proposed budget, along with enhancing investment and employment opportunities, multifarious initiatives have been pronounced to widen the tax net. Stocktaking of implementation status of the programmes announced in the previous fiscals should be taken and properly evaluated.
  Bangladesh tax system needs to be a reflection of our socio-economic and cultural values. To create a system of taxation, a nation must make choices regarding the distribution of the tax burden-who will pay taxes, how much they will pay and how the taxes collected will be spent. In democratic countries these choices reflect the type of community that the people wishes to create. In countries where the public does not have a significant amount of influence over the system of taxation, the system may be more a reflection of the values of those in power to enact laws or to enforce collection.
Dr. Muhammad Abdul Mazid, a former Secretary and Chairman, NBR, is currently Chairman, Chittagong Stock Exchange.
 mazid.muhammad@gmail.com
Budget: Making choices regarding distribution of tax burden
Muhammad Abdul Mazid | Published: June 14, 2015 00:00:00 | Updated: November 30, 2024 06:01:00
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