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Budget 2024-25 to increase the tyranny of Black Money Holders

AK Abdul  Momen

AK Abdul Momen

Sun, 9 Jun 24

The national budget is not merely an annual account of income and expenditure but, in the current context, it serves as a tool to earn the trust and confidence of the people. The government's vision and goals are not confined within the boundaries of budgetary directives alone. Instead, it reflects the initiatives or measures the government is taking or will take to achieve or address issues related to the country's tendencies, resource acquisition, or problem-solving in various aspects. It provides direction on how the government intends to fulfill or will fulfill the expectations of the citizens.

After the presentation of this year's budget, market instability has been observed repeatedly, indicating that the expectations or confidence of the people, for whom the government employees crafted the budget, have not yet been met. Instead, those who will earn through legitimate means are burdened with a tax rate of 30 percent, while those resorting to illegitimate or corrupt practices are taxed at 15 percent or half the rate. The public believes that this will further increase corruption and smuggling. A significant portion of black money arises from the vast difference between market prices and government-set prices. Therefore, if the same value is considered for taxation in transactions such as land sales and home sales based on market prices, there wouldn't be such rampant inflation or instability in black money. Those who want to whiten black money will pay tax according to their tax bracket. Moreover, the matter would not have been unethical if it had been arranged for whitewashing with another 5/10 percent penalty.
Preparing a budget in the current adverse environment is not easy at all. There are major challenges in the country such as (1) reducing inflation, (2) increasing employment opportunities, (3) increasing revenue, and (4) reducing bank loans so as not to see the crowding-out effect, meaning if the government takes all the loans from the banks, businessmen won't get any loans, and they won't be able to invest in expanding their businesses, which in turn won't create employment opportunities, (5) Maintaining or increasing economic growth, (6) increasing investment, (7) restoring confidence in the banking system, (8) fulfilling people's expectations, etc., are being discussed in this year's budget. However, the lack of concrete steps in these areas has led to widespread disappointment among the public.

Former Finance Minister Abul Maal Abdul Muhith has presented numerous budgets, each with specific goals, directives, and various practical steps outlined. Moreover, these budgets often introduced new innovations or initiatives. Particularly notable were the introductions of gender budgeting, district budgets, children's budgets, Public-Private Partnerships, and the decentralization of budgeting. Especially, what honorable Prime Minister Sheikh Hasina desired, namely, to address all these challenges in the budget, was reflected in his budgets. He used to engage in discussions and dialogues with various groups to prepare the budget according to their expectations. However, in this year's budget proposal, that influence was not evident. Despite this challenging environment, there is no remarkable innovation or direction of hope.

For the last one and half year, the government has undertaken various initiatives to reduce commodity prices, but despite these efforts, the prices have not decreased significantly. Moreover, people are skeptical about the government's ability to reduce inflation from 9.7 percent to 6.5 percent in the next six months. Additionally, the transformative changes needed in revenue enhancement are absent in this budget. Under the current rules, those who pay taxes will bear an even heavier burden of taxation, and the larger population of the country will remain tax-exempt in this budget. This is not conducive to the welfare of the country.

Those who possess a National ID (NID) will be required to file tax returns and it will be mandatory for companies to provide their current TIN numbers for the expansion of the tax net and revenue enhancement. When this rule is implemented in Digital Bangladesh, tax compliance will increase manifold, resulting in a significant increase in revenue. As a result, the government will not have to rely heavily on loans. According to estimates, 23 percent of the income will be spent on interest payments, which is not beneficial for the country's welfare.

Author: Former Foreign Minister and president, Parliamentary Standing Committee on Foreign Ministry Affairs.

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