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Logic and Lapse
Finance Minister Saifur Rahman had a lot of sensible things to say when he met a group of members of parliament on Sunday to exchange views on the economic options open to the country. The fact that he sought the opinion of MPs in itself Is a welcome development, particularly at a time when a well-defined national consensus on broad economic Issues has become a vital necessity. It is to be hoped that this kind of exchanges of opinion will become a regular feature, with Cater participation of opposition MPs than
re was on Sunday.
One thing that came through loud and clear from the meeting was the Finance Minister’s concern about domestic resource mobilisation. He said the current Annual Development Budget (ADB) had only a 24 per cent domestic component which, while an improvement on the previous year, was still woefully inadequate. Saifur Rahman's point that such poor domestic Input into the ADB could only be improved by expanding the tax base, through plugging loopholes In fiscal laws and improving efficiency of the tax collection system, is a common sense one and no one should have any disagreement with that. It has been an open secret for years that the amount of revenue trickling into the government's coffers is a mere - fraction of what is possible. Logic therefore dictates that our economic performance, and particularly the government's ability to finance greater part of the ADB from its own resources, can be vastly improved without increasing taxes or imposing taxes on products or earnings previously outside the tax-net. What we need Is greater administrative efficiency, and personal and corporate honesty.
However. Rahman had then gone on to declare that out of 100 big companies, only two had paid taxes; that 200 top businessmen had not paid any tax; and that people living in certain areas of Dhaka and Chittagong, evade taxes most. It is this damning, yet unspecified condemnation of a large segment of the urban population we find so objectionable. If the minister is aware that 98 companies and 200 businessmen are indeed avoiding paying taxes, then why has the government not taken any legal action against them ? The government does not only have the authority and means to bring such culprits to justice, it has a moral, political and legal obligation to do so.
The minister also did not do any justice to his well-earned position of respect by branding inhabitants of so many city neighbourhoods as ^tax-evaders." Are they all in the same category ? Are most of them ? Does the Finance Minister know who they are ? If he does, then why has he not brought the offenders to book ? Or if he does not. then why has he not investigated the matter before making such a sweeping statement ? The minister should understand that his words would carry a far greater Importance — as they indeed deserve to — if they were not laced with remarks that are unfortunate at best, and irresponsible at worst.
Despite the lapse, we have little doubt that Saifur Rahman is more serious than some others about the ministry he heads. We also have little worries about his determination to tackle the problems effectively. We certainly hope that expansion of the tax base would not necessarily be accompanied by an increase in direct or indirect taxation across the board. The government’s fiscal policy should be framed with the clear objective of providing greater incentive to boost production and stimulate domestic demand. In certain areas it may be necessary to lower taxes to achieve those aims. We certainly hope the minister Is in a position to convince his cabinet colleagues of the need for a bold and radical fiscal policy.