Staff Reporter :
Centre for Policy Dialogue (CPD) on Friday said that the proposed national budget for the fiscal year 2018-19 would increase tax and VAT burden on low and middle-income groups of the society while it offered benefits to well-off people.
The budget also offered benefits to affluent citizens like bank owners through reducing corporate income tax, who finance in election, CPD Distinguished Fellow Dr Debapriya Bhattacharya made the comment at a press conference held at Hotel Lake Shore in Dhaka.
Moderated by CPD Executive Director Fahmida Khatun, the conference was also addressed by CPD Distinguished Fellow Professor Mustafizur Rahman, CPD Research Director Khondaker Golam Moazzem and CPD Research fellow Towfiqul Islam Khan.
Debapriya Bhattacharya demanded scraping the proposal of reducing corporate tax rate for banks, insurance and financial institutions, saying that it would not play any role in increasing investment, improving liquidity situation and reducing interest rate.
Rather, he said that the decision would provide a wrong signal to indiscipline banking sector as well as increase the profit of bank owners.
Terming the budget as one of “status quo”, Dr Debapriya said it largely reflected the economic policies and tendencies seen in the last one decade.
“The budget statement builds more on a review of the past, rather than a focus on the future,” the CPD said in its analysis.
The proposed budget also lacks sensitivity towards existing situations and emerging macro stresses being built up on the economy such as pressure on balance of payment and exchange rate, inflationary expectations, it said.
It also gave less attention to areas that require reforms, alongside providing no well-crafted action plan to implement the budget and making concrete initiatives towards strengthening of implementing institutions and oversight mechanisms.
The CPD, however, lauded a number of fiscal measures that have been taken to strengthen domestic-oriented industries and enhance revenue earning.
The think tank welcomed the initiatives on health and environmental issues proposed in the budget, including a 5 percent supplementary duty imposed on polythene and plastic bags.
It also appreciated the move to provide support to the social safety net programmes.
The CPD drew attention to the fact that the issue of underwriting the cost of hosting Rohingyas is missing.
However, it said, compared to the macro-stresses, inclusivity has been better addressed in the budget, although mostly through short-term measures. “Medium-to-long term challenges-inequality, both income and wealth, unplanned urbanisation and other issues-have been ignored.”
The anticipated price pressure of both food and non-food items will fall disproportionately on people from the low-income group and worsen consumption and income inequality situation, according to the report.
The CPD applauded the enhanced surcharges on assets terming it as ‘steps in the right direction’ and hoped that the universal pension scheme would improve inclusively if implemented.
Centre for Policy Dialogue (CPD) on Friday said that the proposed national budget for the fiscal year 2018-19 would increase tax and VAT burden on low and middle-income groups of the society while it offered benefits to well-off people.
The budget also offered benefits to affluent citizens like bank owners through reducing corporate income tax, who finance in election, CPD Distinguished Fellow Dr Debapriya Bhattacharya made the comment at a press conference held at Hotel Lake Shore in Dhaka.
Moderated by CPD Executive Director Fahmida Khatun, the conference was also addressed by CPD Distinguished Fellow Professor Mustafizur Rahman, CPD Research Director Khondaker Golam Moazzem and CPD Research fellow Towfiqul Islam Khan.
Debapriya Bhattacharya demanded scraping the proposal of reducing corporate tax rate for banks, insurance and financial institutions, saying that it would not play any role in increasing investment, improving liquidity situation and reducing interest rate.
Rather, he said that the decision would provide a wrong signal to indiscipline banking sector as well as increase the profit of bank owners.
Terming the budget as one of “status quo”, Dr Debapriya said it largely reflected the economic policies and tendencies seen in the last one decade.
“The budget statement builds more on a review of the past, rather than a focus on the future,” the CPD said in its analysis.
The proposed budget also lacks sensitivity towards existing situations and emerging macro stresses being built up on the economy such as pressure on balance of payment and exchange rate, inflationary expectations, it said.
It also gave less attention to areas that require reforms, alongside providing no well-crafted action plan to implement the budget and making concrete initiatives towards strengthening of implementing institutions and oversight mechanisms.
The CPD, however, lauded a number of fiscal measures that have been taken to strengthen domestic-oriented industries and enhance revenue earning.
The think tank welcomed the initiatives on health and environmental issues proposed in the budget, including a 5 percent supplementary duty imposed on polythene and plastic bags.
It also appreciated the move to provide support to the social safety net programmes.
The CPD drew attention to the fact that the issue of underwriting the cost of hosting Rohingyas is missing.
However, it said, compared to the macro-stresses, inclusivity has been better addressed in the budget, although mostly through short-term measures. “Medium-to-long term challenges-inequality, both income and wealth, unplanned urbanisation and other issues-have been ignored.”
The anticipated price pressure of both food and non-food items will fall disproportionately on people from the low-income group and worsen consumption and income inequality situation, according to the report.
The CPD applauded the enhanced surcharges on assets terming it as ‘steps in the right direction’ and hoped that the universal pension scheme would improve inclusively if implemented.
