BANGLADESH NEWS
Finance Minister AMA Muhith yesterday said the budget for the upcoming fiscal year is not a big one and has been prepared in line with political promises.
"I do not admit that it is a bigger budget. It is a small budget for a country like Bangladesh."
He said the budget size for 2012-13 is Tk 191,738 crore, which is 18.4 percent of gross domestic product. "In terms of GDP, our budget is the smallest in South Asia.”
The minister was addressing a post-budget press briefing at the Osmani Memorial Auditorium in Dhaka yesterday.
He also said questions always crop up about the budget implementation.
After the unveiling of the budget on Thursday, analysts in their reaction said the government would face formidable challenges in implementing the budget.
But Muhith said, "Our implementation capacity has grown extraordinarily. When we came to power three years ago we used to spend Tk 19,000 crore for Annual Development Programme. Now we are spending Tk 40,000 crore."
The minister defended his decision to nearly double the tax at source for the export-oriented sectors including garments industries.
People having more wealth in the country were paying less tax, he said. "Sectors like garments are making huge money, but they are not higher taxpayers like the Square Group. We are showing so much sympathy to them. We have retained the stimulus packages for them."
National Board of Revenue Chairman Nasiruddin Ahmed, who was also present at the briefing, said garment exporters make 10 percent operating profit, whereas they give taxes to the tune of 0.6 percent, which is too low.
"Due to recent exchange rate depreciation of taka, the garment exporters have made an additional profit of Tk 7,000 crore. So, the proposed 1.2 percent tax at source on gross for the export-oriented industries is still low and it should be much higher," he said, citing a study.
"We will adjust it gradually."
Recently, the president of Federation of Bangladesh Chambers of Commerce and Industry said there were 3 crores businesspeople in Bangladesh. Only 30 lakh people have tax identification numbers and one-third of them -- nearly half of them government officials -- pay taxes regularly.
On the issue, Muhith yesterday said, "It is a matter of shame and everybody should admit it.
"There is a mentality of tax-dodging around the world and countries have employed methods to realise tax.
"We are also devising plans to realise more tax."
The finance minister also said there has been an extraordinary achievement in the energy sector, especially in electricity generation. "I do not understand why critics do not see the progress of the electricity sector.”
On the much-talked-about rental power plants, he said, "Bangladesh's reliance for electricity on these plants will come down to 6 percent by 2016 from the existing 21 percent. These plants will retire by the time."
The finance minister said Bangladesh had achieved 5 to 6.7 percent growth in GDP amid stagnant investment situations for several years.
He hoped the country would achieve the targeted 7.2 percent economic growth in the upcoming fiscal year.
On political scenario, Muhith said there has been a major shift in the mentality of the country's politicians. The opposition is not always calling strikes, rather opting for alternatives.
He also denied claims that the International Monetary Fund had imposed conditions for $1 billion credit to Bangladesh. "The IMF has incorporated the government's various measures in its programme."
Muhith said the government does not have plans to award any dearness allowance to the government officials. "We will however set up a permanent pay commission in the remaining period of the government's term."
Agriculture Minister Matia Chowdhury, Bangladesh Bank Governor Atiur Rahman, Planning Minister AK Khandker, Finance Secretary Mohammad Tareque, PM's Economic Adviser Mashiur Rahman and Energy Adviser Tawfiq-e-Elahi Chowdhury also spoke on the occasion.
Matia Chowdhury said many parts of the country face load-shedding at night, as hundreds of easy bikes, a three-wheeler passenger carrying vehicle, consume 300 megawatt of electricity, according to a study.
She said these bikes started to ply the roads during the rule of the last caretaker government. "This is a suicidal decision."
As Muhith noted the imports of such bikes were banned in Bangladesh, Matia said such bikes were also produced within the country on a limited scale.
Atiur Rahman said the country could reach its budgetary target of inflation of 7.5 percent in the new fiscal year, if the government ensured coordination between fiscal and monetary policies.
Mohammad Tareque said the subsidies in 2012-13 would total Tk 34,533 crore or 3.3 percent of GDP.
In the outgoing fiscal year, the government set a subsidy target of Tk 20,447 crore, but it rose to Tk 30,154 in the revised budget.
"I do not admit that it is a bigger budget. It is a small budget for a country like Bangladesh."
He said the budget size for 2012-13 is Tk 191,738 crore, which is 18.4 percent of gross domestic product. "In terms of GDP, our budget is the smallest in South Asia.”
The minister was addressing a post-budget press briefing at the Osmani Memorial Auditorium in Dhaka yesterday.
He also said questions always crop up about the budget implementation.
After the unveiling of the budget on Thursday, analysts in their reaction said the government would face formidable challenges in implementing the budget.
But Muhith said, "Our implementation capacity has grown extraordinarily. When we came to power three years ago we used to spend Tk 19,000 crore for Annual Development Programme. Now we are spending Tk 40,000 crore."
The minister defended his decision to nearly double the tax at source for the export-oriented sectors including garments industries.
People having more wealth in the country were paying less tax, he said. "Sectors like garments are making huge money, but they are not higher taxpayers like the Square Group. We are showing so much sympathy to them. We have retained the stimulus packages for them."
National Board of Revenue Chairman Nasiruddin Ahmed, who was also present at the briefing, said garment exporters make 10 percent operating profit, whereas they give taxes to the tune of 0.6 percent, which is too low.
"Due to recent exchange rate depreciation of taka, the garment exporters have made an additional profit of Tk 7,000 crore. So, the proposed 1.2 percent tax at source on gross for the export-oriented industries is still low and it should be much higher," he said, citing a study.
"We will adjust it gradually."
Recently, the president of Federation of Bangladesh Chambers of Commerce and Industry said there were 3 crores businesspeople in Bangladesh. Only 30 lakh people have tax identification numbers and one-third of them -- nearly half of them government officials -- pay taxes regularly.
On the issue, Muhith yesterday said, "It is a matter of shame and everybody should admit it.
"There is a mentality of tax-dodging around the world and countries have employed methods to realise tax.
"We are also devising plans to realise more tax."
The finance minister also said there has been an extraordinary achievement in the energy sector, especially in electricity generation. "I do not understand why critics do not see the progress of the electricity sector.”
On the much-talked-about rental power plants, he said, "Bangladesh's reliance for electricity on these plants will come down to 6 percent by 2016 from the existing 21 percent. These plants will retire by the time."
The finance minister said Bangladesh had achieved 5 to 6.7 percent growth in GDP amid stagnant investment situations for several years.
He hoped the country would achieve the targeted 7.2 percent economic growth in the upcoming fiscal year.
On political scenario, Muhith said there has been a major shift in the mentality of the country's politicians. The opposition is not always calling strikes, rather opting for alternatives.
He also denied claims that the International Monetary Fund had imposed conditions for $1 billion credit to Bangladesh. "The IMF has incorporated the government's various measures in its programme."
Muhith said the government does not have plans to award any dearness allowance to the government officials. "We will however set up a permanent pay commission in the remaining period of the government's term."
Agriculture Minister Matia Chowdhury, Bangladesh Bank Governor Atiur Rahman, Planning Minister AK Khandker, Finance Secretary Mohammad Tareque, PM's Economic Adviser Mashiur Rahman and Energy Adviser Tawfiq-e-Elahi Chowdhury also spoke on the occasion.
Matia Chowdhury said many parts of the country face load-shedding at night, as hundreds of easy bikes, a three-wheeler passenger carrying vehicle, consume 300 megawatt of electricity, according to a study.
She said these bikes started to ply the roads during the rule of the last caretaker government. "This is a suicidal decision."
As Muhith noted the imports of such bikes were banned in Bangladesh, Matia said such bikes were also produced within the country on a limited scale.
Atiur Rahman said the country could reach its budgetary target of inflation of 7.5 percent in the new fiscal year, if the government ensured coordination between fiscal and monetary policies.
Mohammad Tareque said the subsidies in 2012-13 would total Tk 34,533 crore or 3.3 percent of GDP.
In the outgoing fiscal year, the government set a subsidy target of Tk 20,447 crore, but it rose to Tk 30,154 in the revised budget.
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