NBR
Corruption, extortion part of political culture
Finance Adviser Dr Salehuddin Ahmed has spoken an unvarnished truth about extortion: the level of extortion and illegal levies has increased since 5 August 2024, and stopping extortion, bribery and corruption requires political commitment. Because an extortionist is not just an extortionist—he is also a political player. I had the opportunity to work directly with him when he was the Governor of Bangladesh Bank. Being a man of simple habits, he is free from greed. A CSP officer from the Pakistan era, he is also competent. Upon taking office as Finance Adviser, he said that the state of the economy was not as bad as people claimed. Yet, once in power, the new government’s political gimmick was to publish a white paper on the corruption of the previous one.
Bangladesh’s victory and defeat in US tariff war
After three rounds of discussion, Bangladesh has managed to reduce the increased tariff imposed on its products in the US market from 35 percent to 20 percent. This is not only positive for the country's economy but also a diplomatic success for the interim government. Because when on April 2, US President Donald Trump first announced the rate of additional tariffs on various countries, he stated that a 37 percent additional tariff would be levied on Bangladeshi products. Later, that tariff was suspended temporarily for three months. Trump informed Dr Yunus in a letter that instead of 37, the tariff amount on Bangladesh would be 35 percent, after reducing it by 2 percent.
Some thoughts on the budget for FY 2025-26
The preliminary work for drafting the national budget for the upcoming fiscal year (2025-26) has already begun. If everything goes as planned, the proposed budget will be presented for approval on June 5. Since there is no active national parliament at present, the proposed budget for the next fiscal year will be submitted for approval to the advisory council of the interim government. Since Bangladesh gained independence, the national budget has been approved through the parliament every year, except during periods of military rule and the fiscal years 2007-08 and 2008-09.
No expected result despite tax return filing deadline extension
Even though the tax return submission deadline has been extended, desired returns have not been filed.
Internet tax to be reduced
The National Board of Revenue (NBR) has decided to reduce the 23 percent supplementary tax on mobile phone calls, internet use and IT services and restore the previous 20 percent tax after a long-standing protest by internet service providers.
Excessive foreign debt erodes financial independence
In the 1970s, an American development economist visited Bangladesh. At one point, he gave a speech to the faculty members of Dhaka University. The economics department’s professors were notably present at this event. During his address, the American economist presented his views on why Bangladesh’s economic development was not progressing to the desired level. The professors in attendance listened intently to his words. At that moment, a young economics professor from Dhaka University stood up and said to the American economist, "The reason we are unable to achieve the desired level of development is because you are intervening in our economy in various ways." After a brief pause, the American economist replied to the young professor, saying, "If 80 percent of the funds for your country's development activities come from us, whose economy is it? If you were able to finance your development from domestic sources, we would not need to offer any advice." Hearing this, the young professor remained silent and sat down.
Why sudden VAT increase amid high inflation?
For the past two years, the people of the country have been struggling against rampant high inflation. According to the Bangladesh Bureau of Statistics (BBS), the average inflation last year was 10.34 per cent. Although the overall inflation decreased slightly in September, food inflation remained above 10 per cent. BBS data shows that in December, food inflation was 12.92 per cent, while non-food inflation was 9.26 per cent.
Govt raises VAT, duties on over 100 items
Amid high inflation, the government has raised taxes, duties, and VAT on over a hundred goods and services, including essential items such as medicines, LPG, and mobile SIM cards.
Why sudden VAT hike amid soaring prices?
While vegetable prices have started to decrease slightly in the middle of winter, the prices of essential goods are still out of control. The prices of rice, lentils, and oil are beyond reach for most people. Recently, the price of chicken also increased. Amid all this, there is bad news for consumers at the beginning of the new year: VAT has been increased on 65 goods and services. This sudden VAT hike has been imposed under pressure from the IMF. Moreover, midway through the current fiscal year (2024-25), the government has taken the step of increasing VAT, supplementary duties, and other taxes to boost revenue. Initially, 15 per cent VAT will be imposed on 65 types of goods and services. This news is concerning for ordinary people who are already suffering from the pressure of inflation.
