Finance adviser Dr Salehuddin Ahmed has said that boosting the tax to GDP ratio and attracting more Foreign Direct Investment (FDI) are some of the big challenges before the government apparently in a bid to streamline further the country’s economy, reports BSS.
“The reality is that many people are not paying tax and we’ll have to widen the tax net further. We’ve taken some initiatives for which income tax has increased this time,” he said.
The finance adviser said this while giving an interview to BSS, the national news agency, recently.
Dr Salehuddin said although there were commitments for foreign loans and investments, but the response was not so positive so far while the flow of FDI is not much significant.
He said that the business community is demanding before the government for addressing the regulatory barriers apart from simplifying the customs policy, issues related to high tax rates as well as the alleged tax disparities.
He said that the country has lack of resources while the tax to GDP ratio is also low for which the tax base is not getting bigger.
The finance adviser said that those who pay direct tax are compliant, but the reality is that many people are still not paying due taxes.
He said apart from the local financing, the government has to rely on the foreign loans for properly implementing the Annual Development Programme (ADP).
He informed that a huge amount of foreign loans are in the pipeline especially from the World Bank, JICA while disbursements to this end would take some time.
“Although there are plenty of commitments, but the disbursements are a bit slow…But, now it has gained some momentum,” he added.
Citing attraction of more FDI as a major issue and also a big challenge before the government, the finance adviser said that smooth FDI flow depends on various calculations, law and order situation of the country, regulatory issues, rules and regulations of the NBR, tax collection, and related polices of the central bank.
He noted that the issue of attracting more FDI and investments depend on the investment confidence while the Bangladesh Investment Development Authority (BIDA) and other concerned agencies are working tirelessly to that end. “As a result of these, the overall investment situation has come to a position,” he added.
Mentioning that the central bank is now allowing the foreign companies to repatriate their profits, Dr Salehuddin, also the former central bank governor, said that the situation to this end has improved.
Besides, the government is also trying to address issues like simplifying tax procedures, clearing customs as early as possible, and unloading of commodities at the ports.
At the same time, the government is also trying to provide input support, policy support and regulatory support to the investors for attracting more investment, he added.
Referring to the establishment of Economic Zone at Mirersarai in Chattogram, the finance adviser said that the concerned government agencies are working to ensure utility services like gas, electricity, and water there and it would take some time.
“But, there is FDI inflow while many foreign companies are investing there, side by side some are also making their expansions,” he added.
Bd-Pratidin English/ AM
