IBFB webinar highlights the prospective policy recommendations for National Budget

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Salma Urme : International Business Forum of Bangladesh (IBFB) has recently organized a webinar on “National Budget 2021-22 ‘Policy Recommendation’”. The event held on January 23, 2021, mainly highlighted the various aspects of a timely and suitable budget in accordance with the ongoing socio-economic scenario.

Eminent personalities like Dr. Atiur Rahman (Ex-Governor, Bangladesh Bank), Dr. Debapriya Bhattachrya (Distinguished Fellow, CPD), Dr. Khan Ahmed Sayeed Murshid (Director General, BIDS), M.S. Siddiqui (Legal Economist & Vice President, IBFB), Alihussain Akberali, FCA (Chairman, BSRM Group of Companies) and more were present at the webinar.

Discussions on the webinar summed up the financial projections of investment in the SME sector. Most SMEs have encountered poor access to finance in any part of the world in the past few months. Adequate access to finance is crucial if SMEs are to survive and grow in the coming years. The national budget usually allocates a few hundred crores of Taka to support the ailing public sector bank, which hardly shows any improvement. The webinar recommended that the Government may impose a condition for these banks to extend loans to SMEs to qualify for budgetary support. It also shed light on the Taxation system and the reformation of NBR procedures. NBR has an easy-going policy of gatekeeper on the entry point of export and import at the port to collect AIR and advance VAT. These easy collection policies made the NBR of customs duty, AIT, and Advance VAT are holding back the reform of the tax department. The historical role of AIT and customs duty is always regressive on economic development. Tax deduction at source and minimum tax regimes go against the spirit of income tax principles. Revenue strategy must move away from a sales-based tax system to profit or income-based income tax. The deduction at source and advance tax needs to be rationalized so that such a tax’s final incidence cannot be more than what the assessed tax on profits would be.

The webinar also suggested that the budget may encourage document-based transactions of business and the purchase of moveable and immovable properties. All payments should be through a banking system with a threshold for micro and small businesses. The budget is also one of the instruments to eliminate or reduce corruption. The best alternate process is to locate the black money and block the utilization of this money for the comfort of corrupt peoples. Usually, the black money holders create false companies under the name of their relatives, and the budget has loops for investment in such companies in the name of a black money whitening scheme. The facility should be allowed only after paying regular tax as well as some additional penalty. Discussions on bond facilities for various industries, cost of maintenance of bond license and taxation of the industries, the efficiency of tax audit strategies to reduce the risk of leakage, potential reformation measures for the NBR such as the establishment of the data bank, and increased emphasis on advanced IT-based solutions, overall accountability of  NBR – all in all, pointed to a successful webinar on improving the quality of the upcoming national budget.

President of IBFB Humayun Rashid adorned the webinar with his opening remarks. Former Secretary & EX-Chairman of NBR and Chairman, Finance Committee, IBFB Dr. Muhammad Abdul Mazid was appreciated for his paper presentation. The webinar concluded with the Vote of Thanks from Lutfunnisa Saudia Khan, Vice President Finance, IBFB.