Planning Minister MA thinks that the government could not properly handle the VAT law to tap its immense potential for boosting revenue collection.
“There was huge potential of VAT Law, but I think we could not properly handle it even though the law was passed in 2012,” the minister told a post-budget dialogue of Centre for Policy Dialogue (CPD) on Saturday.In reply to an observation of business leader Nihad Kabir for more cut in corporate tax, Mannan said: “By and large, the scope of more corporate tax cut is thin in the context of our economic condition.”
“If VAT collection could be improved with proper implementation of the VAT Law, the corporate tax would have been possible to cut even further,” he pointed out.
It is strange that businessmen claim that they pay VAT but it is paid by the consumers, they are simply the collectors, he also commented.
He also expressed his reservation about over-dependence on foreign money for budget implementation, saying: “I don’t feel so much comfortable about foreign money as it has some teeth and some issues. “If I get local money, then I don’t support foreign money.”
The minister said he was and is still against providing 2 percent cash incentives on remittance on a wholesale basis.
Instead, he said the incentive should have targeted the small remitters, not the big ones. “I’m even in favour of raising it to 4 percent if it can be capped for small remitters.”CPD Chairman Prof Rehman Sobhan raised the question with regard to how quality can be ensured in ADP money spending when ADP spending sees a big jump at the fag end of a fiscal year.
The planning minister defended the allegation saying that bills are paid in the ending months, which is not reflected in the March-April’s reports. “Bill payments are always behind the submission time.”
Referring to a Prime Minister’s directive for enhancing ADP oversight capacity of IMED, he said they were trying to improve the capacity of the project watchdog, the capacity of which is lagging far behind in terms of overseeing more than Tk 2 trillion ADP projects.
About the absence of real-time data on poverty or other important issues, Mannan said he was trying to help BBS so that they academically and intellectually generate quality data.
“I always ask them (BBS) to try to do better so that they themselves can generate pure, correct and reliable and continuously dependable data. The work for improving the quality of BBS data is going on slowly,” he said.
Ruling party Lawmaker Saber Hossain Chowdhury alleged that lawmakers have little role in budget formulation or other policy making.
Moderating the event, CPD’s Distinguished Fellow Prof Mustafizur Rahman observed that budget size doesn’t matter, but its quality implementation should be the main focus.
In the context of Covid-19, issues of public health, social security, unemployment benefits, universal pension scheme should come in the front and the necessary money should come from domestic savings or foreign assistance.
At the same time, investment in IMED’s capacity building, necessary preparation and reforms in the run-up to the LDC graduation and resource redistribution are also very important issues, the noted economist reminded.
“Resource redistribution is not possible without enhancing Tax-GDP ratio. Covid is leaving a big shadow on us, so marginal people, children health risk should be our priority,” he said.