Economists at a discussion yesterday stressed the need for increasing investment if the country has to achieve the economic growth target as estimated in the budget for the next fiscal year.
The investment needed to be increased by 4.5% to 32.7% of GDP in achieving the growth target of 7% for the next fiscal year, former adviser to the caretaker government AB Mirza Azizul Islam said.
The GDP growth target will not be achieved unless the government encourages investments through providing favourable business atmosphere, infrastructural facilities and favourable tax regime, he said.
At present, the rate of investment is 28.98% of the country’s GDP.
The economist made the observation at a discussion titled ‘Budget FY2015-16: views of the business community’, jointly organised by Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Research Institute (PRI) at MCCI headquarters in the city.
MCCI Vice-President Anis A Khan moderated the discussion while State Minister for Finance MA Mannan attended the event as the chief guest and National Board of Revenue (NBR) chairman as special guest.
In his address, PRI Chairman Dr Zaidi Sattar said the policy dilemma for FY2015-16 budget is to provide protection for local industry and to stimulate investment.
“The policy dilemma is emerging as whether to persist with high protection of most import-substituting industries or to focus on export orientation,” he said.
“To achieve the targeted GDP growth, the highest growth has to come from industry, mainly from export-oriented manufacturing.”
Along with the protection of local industries, the economist also stressed more export promotion because imbalance of incentives will discourage exports and create dilemma.
“The consumers bearing the ultimate burden of protection tax are left out of the pre-budget consultation process,” he said, adding that they should be included in such consultation to talk about consumer rights.
PRI Executive Director Ahsan H Mansur and MCCI committee member Adeeb H Khan presented separate power point presentations.
During his presentation, Ahsan H Mansur said the growth rate of 7% will be challenging, but attainable.
“Focus should be on how to increase private domestic and foreign investment commitments through initiatives like establishment of special economic zones,” he said.
Regarding the revenue target, he said, attaining the revenue target will be extremely difficult.
“The discretionary measures on both direct and indirect tax fronts will have revenue potential if right administrative mechanisms could be put in place like proper rationalisation of taxation of cigarettes, preventing tax avoidance by super tax groups and strengthening of payroll tax withholding,” he said.
He also observed that the government should make an effort to mobilise external financing by accelerating the utilisation of foreign aid pipeline or by issuing sovereign bond in the international capital market.
NBR Chairman Nojibur Rahman said the tax authority is deeply optimistic about its revenue target.
“We are now working on for taxpayer-friendly administration and reform is going on. The NBR has signed an agreement with Dhaka Chamber of Commerce and Industry to expand the tax fair up to upazila level as part of expansion of tax net,” he said.
Source: Dhaka Tribune
