Budget targets ambitious

Total budget increased by 18 percent as compared to revised budget 2018-19. Similarly, development budget increased by 22 percent as compared to revised budget as well. No doubt, this is ambitious and involves lot of challenges in implementation.

In the current year, the level of implementation is really well below the expectation. Capacity, both technical and logistical, of the government is really an issue specially in implementing large projects. Cost escalation and time overrun are matters of concern as we have been experiencing in Bangladesh. However, we hope that government will overcome this situation by improving its capacity level.

We have been constantly advocating, among others, for expanding tax net, minimising tax evasion, simplifying process of tax collections and minimising harassment of the genuine and honest taxpayers. Procedures applied beyond law, distorting and misusing bank attachment practice, arbitrary disallowances and creating a non-tax-friendly environment are major concerns. These are tax administration issues and deserve special attention to create a tax-friendly environment.

We welcome Hon'ble finance minister's indication of bringing tax administrative reforms, the magnitude of which is yet to be seen. Digitalisation of the whole process is a need of the time. The government should give more focus in this area. Awareness of the taxpayers about digitalisation so far done needs special attention. The capacity of the National Board of Revenue (NBR) in achieving such a huge target is no doubt a big challenge. An administrative reform is now overdue to make the taxation system more transparent and a corruption-free environment. We believe that the government will give due attention in this regard.

Tax on stock dividend (bonus shares) and retained earnings is not justified and is likely to discourage good companies to enter into capital market apart from impacting on existing listed companies. Investment in high tech parks and economic zones by paying 10 percent tax is a way of whitening black money as no question will be raised as to its sources.

Introduction of multilevel rates of VAT is in fact, a continuation of existing system. Since VAT automation is key to this new VAT Act, steps should be taken immediately for its smooth implementation. The government also needs to review the impact of bringing all the tariff rated VAT-payers into the VAT bracket of 5 percent and also not allowing VAT credit to the VAT registered person who does not pay VAT at 15 percent.

Exclusion of chartered accountants from authorised VAT practitioners or representatives is unjustified and will impact the smooth and successful implementation of the VAT Act.

Increasing the import duty on finished goods and reduction of import duties on basic and intermediary goods definitely encourage the growth of local industries.

The writer is president of the Institute of Chartered Accountants of Bangladesh