Concerned about the potential crises stemming from increased VAT and other duties, the BNP has proposed 12 alternative measures to boost revenue without resorting to raising taxes or VAT.
The interim government recently increased VAT and supplementary duties on over 100 goods and services, revoked tax exemptions on certain items, and imposed new taxes.
This decision has drawn criticism from various quarters, including economic analysts and the Bangladesh Nationalist Party (BNP).
At a press conference held at the BNP Chairperson's political office in Gulshan on Saturday (January 18), BNP Secretary General Mirza Fakhrul Islam Alamgir presented these recommendations.
BNP’s Key Recommendations:
Focus on direct taxes:
Increase income tax rates for the highest income brackets.
Expand wealth taxes (surcharges).
Enhance revenue collection from non-tax and non-revenue sources, such as narcotics duties, vehicle taxes, administrative fees, service fees, leases, and tolls.
Increase tax compliance:
Enforce mandatory tax return submissions for all Tax Identification Number (TIN) holders to widen the income tax net and improve tax collection efficiency.
Tackle tax evasion:
Incorporate taxable income into the system to prevent evasion, ensuring transparency and stability in the tax system.
Utilise frozen assets:
Legally use assets of corrupt individuals and idle government funds to boost revenue.
Recover misappropriated funds:
Actively pursue the recovery of black money and funds looted from banks and non-performing loans.
Target the estimated $234 billion in corruption-related losses as identified in previous reports.
Seek international support:
Leverage the international goodwill of the interim government to renegotiate loan conditions with the IMF and secure grants or loans from donor countries and organizations.
End unfair tax exemptions:
Revoke unethical corporate tax exemptions granted to powerful individuals and institutions by the previous government to increase revenue.
Recover defaulted loans:
Enforce repayment of loans from large defaulters and recover laundered money.
Reform revenue administration:
Address corruption and mismanagement in the revenue administration.
Ensure transparency and accountability in the National Board of Revenue (NBR) to achieve revenue targets.
Prevent tax evasion with technology:
Reduce annual revenue losses (estimated at Tk 56,000 crore to Tk 3 lakh crore) by automating tax administration processes and leveraging IT solutions to prevent evasion.
Reorganise the NBR:
Restructure the NBR to reduce dependence on indirect taxes, which disproportionately burden lower-income groups.
Promote agricultural development:
Boost agricultural productivity by utilising unused land, including household courtyards, for cultivating essential crops and vegetables.
Reducing expenses to bridge budget deficit
Mirza Fakhrul highlighted that the current budget deficit of over Tk 2.5 lakh crore poses a significant challenge. However, he emphasized that rationalizing expenditures on unnecessary mega projects and addressing inefficiencies in sectors such as quick rental power plants could save billions.
Call for policy reconsideration
The BNP Secretary General urged the government to immediately withdraw its decision to impose indirect taxes on the public and adopt alternative measures to tackle the economic crisis.
BNP Standing Committee Member Amir Khasru Mahmud Chowdhury and Chairperson’s Advisor Zabiullah were also present at the press conference.