Economists and business leaders at a pre-budget discussion urged the government of Bangladesh to launch structural reforms of the National Board of Revenue (NBR) including its complete digitalisation.

They said this would help to ensure a hassle-free business environment, increase the tax to gross domestic product (GDP) ratio and bring more foreign direct investment (FDI) in the country.

The speakers also called upon the government to simplify tax policies and product value declaration process, ensure accountability, good governance and political commitment.

They stressed macroeconomic stability, tackling inflation, availability of data, reviving Small and Medium-sized Enterprises (SMEs), reducing dependency on indirect taxes, and making two revenue sources like Direct Taxes Board and indirect Taxes Board.

The recommendations were made at a pre-budget discussion organised by the Institute of Chartered Accountants of Bangladesh (ICAB) at its ICAB Council Hall in the capital city on Sunday.

Executive Director of Policy Research Institute (PRI) of Bangladesh Dr Ahsan H Mansur said the government should focus on macroeconomic stability, tackling inflation and availability of data in the next budget.

“The current high inflation may be longer for further six-nine months in the country. Necessary measures also need to be taken to stabilise macroeconomics,” he said.

The economist also highlighted 4IR and Artificial Intelligence, installing VAT Act -2012, widening tax net.

“Tax collection can be increased three times more through a complete holistic approach. So, the government has to enforce laws and strengthen administrational capacity as well as ensuring accountability,” Dr Mansur added.

PRI Senior Economist Dr Ashikur Rahman said agriculture, education, health, social safety net issues should be prioritised instead of only infrastructure development in the upcoming budget.

Former State Minister for Planning Dr. Shamsul Alam was present as chief guest. He said  the tax to GDP ratio in Bangladesh is lower than India, Pakistan and Nepal. “Tax-GDP ratio needs to be increased to bring more FDI,” he said. 

Dr Shamsul Alam said, “Tax to GDP ratio is 17.49% in Nepal, 11.7% in India and 10.4% in Pakistan while only 7.8% in Bangladesh. It should be increased. We tried to bring a change in the NBR and IMED (Implementation Monitoring and Evaluation Division), but we could not do it yet.”

Former President of the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka Md Saiful Islam said some ministries should be merged to help a hassle-free business environment and build a “Smart Bangladesh.”

Executive President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Mohammad Hatem claimed that the Export Promotion Bureau (EPB) was giving the wrong export figures which made an impact on their business.

He urged the government to take necessary steps to relieve business people from “hassle by the NBR officials and law enforcement agencies on roads.”  

ICAB President Mohammed Forkan Uddin laid emphasis on increasing revenue, avoiding contradictions in laws and prevention of tax evasion, ensuring transparency in the application of laws and giving more encouragement to investment activities.

“To avoid contradictory provisions and loopholes of the existing Act, ICAB proposed to include the definition of ‘industrial undertaking’. Any change in the financial budget through the Finance Act should always be applied prospectively,” he said.

The ICAB president added, “Rationalisation of tax deduction at source mentioned in Sections 89, 90, 120, 117 and 118 of the Income Tax Act, 2023 was also proposed by ICAB.”

Moderating the session, ICAB’s former president Dd. Humayun Kabir urged the government to make a good environment for business people to create employment and achieve economic growth.