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Making budget for life
FROM PAGE B4
They are producers, they are consumers, and they are employers. The economy will not survive if these informal sector businesses cannot operate.
Some crowds in shopping malls and markets or full bookings in hotels in tourist areas do not represent the whole country. Certain sections of people would point to the crowds and say, “See, businesses are bouncing back. People are spending. Our foreign currency reserve is soaring, per capita GDP has been sharply increased, etc.”
But this is not the case. There has been inequality in the economy, and the pandemic has widened it.
The next budget needs to look into the livelihood issue and drop extravagant projects to spend more on social welfare, health, and education.
Many labour-intensive economic sectors are on the verge of ruination. The budget should identify them and support them. Sectors that will save lives and jobs should be prioritised over projects that will take years to complete and deliver fruits.
Whatever budget we have for education, it all went to pay for the salary of teachers, the distribution of free books, buying chairs and tables and constructing school buildings. No effective initiative to ensure the study of students, particularly those in villages, who lost two academic years during the pandemic. The price of this learning loss will be huge.
So, allocating more for education in the budget will not do any good if students cannot learn and if quality education is not ensured. Recruiting several thousand doctors and paying them salaries would not improve healthcare services if they are not properly trained and proper facilities are not put in place.
THE BLACK MONEY DEBATE
It has been crystal clear that money is being generated illegally through corruption and a good portion is smuggled out of the country. This money needs to be incorporated into the formal economy. But at what and whose cost?
You are not fining those who amassed money through illegal means, you are not questing their source of income and you are welcoming them to legalise their unjust incomes through a subsidised tax rate, whereas genuine taxpayers are made to pay 25 to 30 per cent. This is an ethical deviation, which will demoralise and punish honest taxpayers and reward the wrongdoers. What is even more alarming, the holders of the money spend to enhance their influence in the power circle and destroy our institutions one by one.
If they are allowed to invest in the sectors like housing and the stock market, it will cause price inflation and put others’ money at risk. The scheme also contradicts the state policy stipulated in the Constitution.
If the government still wants to include black money into the formal economy, it can allow it on the condition of paying applicable tax and investing in labour-intensive and production-oriented industries.
Emerging economies need to launch drives against black money every 15 to 20 years, and allow legalising undisclosed income through strict rules and payment of higher-than-usual taxes with fines.
REVENUE INCOME
Where will you get the money from when the economy is stalled? If people lose income, they will not get income tax. If sales drop, VAT revenue will be less. If imports fall, customs duties will decline, though, in recent times, there has been a substantial increase in customs duty on imported items as the prices of imported items have gone up globally. In such a situation, revenue income will definitely fall and there is no point in raising hue and cry over it.
The government needs to be practical in setting revenue targets for the National Board of Revenue. When the entire economy is in crisis, setting a high-flying revenue generation target will be unwise. The government should cut recurring non-development, luxurious, and rent-seeking expenditures.
The NBR has long been suffering when it comes to the manpower issue. Since the 1990s, it has spent about Tk 500 crore on digitalisation projects, but the automation is progressing at a snail’s pace.
A quick switch to the online system remains the only answer to the NBR’s problem. It will help overcome manpower shortage, plug tax evasions and make up the revenue deficit to some extent. It remains the only option for NBR since there is little scope to impose new taxes during this post-pandemic and pre-election year.
The author is a retired secretary and former chairman of the National Board of Revenue

Asia’s factory
FROM PAGE B4
“Rising inflation is forcing some Asian central banks to tighten monetary policy. There’s also the risk of market volatility from US interest rate hikes. Given such layers of risks, Asia’s economy may remain weak for most of this year.”
Lockdowns in China have snarled regional and global logistics and supply chains, with both Japan and South Korea reporting sharp declines in output.
Japan’s manufacturing activity grew at the weakest pace in three months in May and manufacturers reported a renewed rise in input costs, the PMI survey showed, as the fallout from China’s lockdowns and the Ukraine conflict pressured the economy.
The final au Jibun Bank Japan PMI fell to a seasonally adjusted 53.3 in May from the previous month’s 53.5, marking the slowest pace since February.