Govt planning big reforms in revenue sector

The government has plans for massive reforms in the revenue sector as it aims to increase collection and gradually reduce subsidies so that Bangladesh can smoothly graduate to a developing nation, according to speakers at a seminar.

Government high-ups presented the reform plans at a national seminar on "LDC Graduation", organised by the Support to Sustainable Graduation Project (SSGP) of the Economic Relations Division (ERD) at a hotel in Dhaka yesterday.

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While presenting the keynote on internal resource mobilisation and tariff rationalisation, Fatima Yasmin, senior secretary of the Finance Division, said the government has decided to abolish minimum import prices by gradually phasing them out.

The government has already withdrawn the minimum import price on 55 items this year while that of the remaining 130 products will be eliminated by 2026, when Bangladesh will graduate from the least developed country (LDC) status.

In addition, the National Board of Revenue (NBR) recently initiated a "Tax Expenditure Study" to increase the country's tax-GDP ratio.

Besides, initiatives are underway to determine tax rates in line with global best practices, she added.

Yasmin then said the NBR plans to install three lakh electronic fiscal device (EFD) machines in the next five years, the task of which will be outsourced.

"Currently, 8,077 EFDs are in use," she added.

Yasmin went on to say that the NBR has identified 60 tariff lines where the addition of customs duty, supplementary duty, regulatory duty and other duties and charges (ODC) exceed the bound tariff.

"These rates will be gradually rationalised and brought under the bound tariff by 2026," she said, adding that the commerce ministry is drafting the National Tariff Policy in close collaboration with NBR.

Regarding the cash incentives for exporting certain products, the secretary of the Finance Division said the government will gradually phase them out as they have little impact on the volume of outgoing shipments.

"Although India did not provide any such cash incentives, its exports still grew more than Bangladesh. So, it can be assumed that there are many other factors that contribute to export growth," Yasmin said, citing export data of the two countries between 1989 and 2015.

Zakia Sultana, secretary of the industries ministry, said Bangladesh must align itself with other LDCs in lobbying for an extension of the general transition period after graduation.

As such, the country must continue bilateral discussions with developed countries to this end, much like what India, China, Kenya and others are doing.

Planning Minister MA Mannan termed LDC graduation as an important milestone in Bangladesh's development journey.

"The LDC graduation process would not only generate better strategies and action plans, but also create a sense of ownership among all," he said.

Md Shahriar Alam, state minister for foreign affairs, said Bangladesh could become a bridge between the East and West in the aftermath of its LDC graduation.

Ahmad Kaikaus, principal secretary to the Prime Minister, said Bangladesh's economy is strong and one of the country's greatest strengths is its huge domestic demand and supply.

Sharifa Khan, secretary of the ERD, said LDC graduation would enhance the country's image in the international arena, which would help attract foreign direct investment and expand the market for Bangladeshi goods and services.

While speaking as guest of honour, UN Resident Coordinator in Bangladesh Gwyn Lewis said a well thought-out, consultative, time-bound, action-oriented, and implementable transition strategy would be key for ensuring a sustainable LDC graduation.

Abdur Rouf Talukder, governor of Bangladesh Bank, said the enhanced capacity acquired through the graduation process would also enable the country to attain its other national development goals, including the sustainable development goals and Vision-2041.

Md Jashim Uddin, president of the Federation of Bangladesh Chambers of Commerce and Industry, said the impending LDC graduation has generated more opportunities for investment and expanding the country's industrial base.