Planning minister MA Mannan said on Saturday the National Board of Revenue (NBR) needs extensive reforms to boost its capacity as the national tax body.
He, however, said the much-needed transformation is not so easy a job. "It's easy to say, but difficult to do."
"There're strong vested interest groups and beneficiaries," Mr Mannan said without explaining much about the roadblocks to reform.
He was speaking at a post-budget discussion co-hosted by the Institute of Chartered Accountants of Bangladesh (ICAB) and a national daily in the capital.
He said there are misconceptions about NBR's role. "NBR is not a revenue generator, it's only a collector."
The senior minister said his personal position is against the multilayered VAT structures.
"I've always been talking against multilayered VAT system… If you want to exempt some necessary commodities, do it, and make a single VAT rate for the rest of the sectors."
Mr Mannan said he does not believe in banking commission for reform in the banking sector.
"I've seen many commissions, it's just job creation for some people," he continued.
"We have laws, we have a central bank. If they need to be strengthened, we should do that," the minister said.
Pushing bank interest rates to single digit might not be a right decision for the industry, he observed.
Policy Research Institute (PRI) executive director Ahsan H Mansur said the proposed budget is going to fall flat in terms of its size.
This year's revenue income growth is 7.1 per cent, which is an all-time low, he maintained.
"NBR won't be able to achieve its target for this budget too like the past years," he said, adding that 80 per cent problems lie with the tax administration.
"The rest of the problems are with the tax policy."
Mr Mansur said the solution lies with the separation of tax administration from its policy. "NBR shouldn't formulate tax policy."
Bangladesh will not be able to achieve its targeted GDP growth and sustainable development goals (SDGs) if NBR is not restructured, he added.
Dhaka Chamber of Commerce and Industries former president Abul Kashem Khan said banks have liquidity crisis, non-performing loans are rising and government borrowing is going to be Tk 420 billion.
"Where would the required private-sector money come from?" he questioned.
Even government dictation on cash dividend is not business-friendly, Mr Khan said.
He urged the government to set an example by publishing photos of loan defaulters.
Association of Bankers, Bangladesh (ABB) chairman Syed Mahbubur Rahman said the government should go for "naming and shaming" defaulters through publishing their photos in the media and restricting privileges.
Whatever has been announced in the budget for the banking industry is good, he said, but the problem lies with implementation.
About banking commission, he said if competent people do not sit on the commission, its credibility will be in question.
The burning issue in banks is NPL management, said Mr Rahman, expressing his disappointment over the spun-out process of the resolution of the NPL cases.
He said Artha Rin Adalat Ain is good, but the deficit is in the implementation and capacity.
He criticised the dictating bank interest rate, adding that Kenya tried this to bring bank interest rate in single digit and backfired.
ICAB president AF Nesaruddin said administrative reform is now overdue to make the taxation system more transparent and a corruption-free environment.
"Tax administration-related issues deserve a special attention to create a tax-friendly environment," he cited.
Federation of Bangladesh Chambers of Commerce and Industry president Sheikh Fazle Fahim and Bangladesh Institute of Development Studies senior research fellow Dr Nazneen Ahmed, among others, also spoke.
© 2020 - All Rights with The Financial Express