Planning Minister AHM Mustafa Kamal yesterday criticised Bangladesh's high tax rates, saying it prevents government from earning more revenue for the country.

"Lower tax rates can generate more revenue than higher tax rates," Kamal told economic reporters at a training programme at the Metropolitan Chamber of Commerce and Industry (MCCI).

The minister also talked on the budget preparation and institutional capacity to implement the annual budget of the country.

The Economic Reporters' Forum (ERF) organised the programme for its member reporters to understand the budget reporting. Kamal was speaking as the chief guest at the certificate giving session, which was also attended by MCCI President Syed Nasim Manzur.

The minister said the tax-GDP ratio in Bangladesh is only 11 percent, which needs to be raised to 14 percent. "But this is not happening because of high tax rates," he said.

In Thailand, the highest tax rate is 24 percent, Hong Kong 15 percent, Singapore 17.5 percent and Malaysia 24 percent. But it is 30 percent in Bangladesh for the taxpayers who earn Tk 30 lakh ($38,542) or more a year.

"There are examples of many countries that reduce the rate, earn more," said Kamal, also a certified accountant. He asked the government to reduce the tax rates in different phases, if not possible at a time.

The minister said tax offices should be set up at all upazilas to bring potential taxpayers into the net. Electronic machine has to be installed at all shops to avert tax dodging by the traders, he said and suggested the government to extend easy loans, so the traders can buy the machine.

On the budget preparation, he said it is a top-down approach and the size is determined on the GDP figure. He said a right budget must analyse all components – from micro to macro, revenue income and expenditure before fixing the budget size.

He also stressed the need for effective implementation of the budget; otherwise the benefits will not be passed on to the people.

MCCI President Manzur believes few people pay taxes in Bangladesh and there is ample scope to widen the net.

Earlier, Arastoo Khan, member of the Planning Commission; three senior officials of the National Board of Revenue–Ranjan Kumar Bhowmik, Dr Abdur Rouf and Ehteshamul Hoque—and Showkat Hossain Masum, head of reporting of Bangla daily Prothom Alo, conducted various training sessions on their respective areas.