Consider properties’ current market value for wealth surcharge

Valuation of properties when determining surcharge on net minimum wealth should be based on current market value, not their purchase value, according to research and advocacy platform the International Business Forum of Bangladesh (IBFB). 

For instance, anyone who had bought a house in Gulshan 40 years ago now pays surcharge on its market value at that time, which is not reasonable, said Humayun Rashid, president of the IBFB.

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They have to pay surcharge on the estimated value at present, he said, adding that this would help generate more revenue for the government.

Rashid, also managing director and CEO of Energypac Power Generation Limited, was addressing an event styled "Proposed National Budget 2023-24: Expectations and Achievements" at National Press Club in Dhaka yesterday.

Finance Minister AHM Mustafa Kamal proposed the budget of Tk 761,785 crore for fiscal year 2023-24 in parliament on June 1.

Total revenue earning has been estimated at Tk 500,000 crore. Of this, the National Board of Revenue (NBR) will collect Tk 430,000 crore, and the rest will be collected from other sources.

There is no good news for the fixed income group and there is almost no significant step towards improving the process of doing business in the budget, he said.

The budget mentions of Bangladesh's upcoming United Nations country status graduation from a least developed to a developing country but does not specifically mention any reform except a promise to bring reforms to the tax structure, Rashid said.

There are no steps to reform the financial or banking sector, the backbone of the economy. If the financial sector does not make a turnaround, the entire economy will become more fragile, he thinks.

The budget speech contains the country's development journey of the past one and a half decades and mentions of praise of the government by foreign leaders, said the IBFB.

But since there is no explanation of the context of the challenges currently visible, the government appears to be helpless in dealing with those difficulties and there is no roadmap to implement strategies to deal with those, it said.

As per the proposed budget, registered taxpayers, who have to file their income, expenditure and wealth statements to avail 38 services, will need to pay a minimum tax of Tk 2,000 even if they have no taxable income, said the forum.

Aimed at encouraging taking part with the government in enabling public welfare, this minimum tax is expected to generate an additional revenue of Tk 1,240 crore, it said.

The process of collecting the minimum tax will create administrative complexities, increase fraudulence and the objective will remain unattained, said the IBFB.

The forum feels that the proposed budget should be reviewed on a quarterly basis to ensure proper implementation.

"We need to heal the economy and then set revenue targets. Otherwise, it cannot be achieved," said Muhammad Abdul Mazid, a former chairman of the NBR.