One cannot but marvel at the sense of proportion, or the lack of it, of the finance minister. Apart from inflicting himself on the poor people of Bangladesh every year through the ever-increasing burden of tax, his innovative ways of finding more avenues to perpetrate evermore the burden, in the name of development, are running the patience of the people thin.
Increase in prices of essentials has been explained away by the very facile argument of increase in earning of the general public — little acknowledging the hard reality that prices have risen in tandem with the increase in earning.
Much has been written about value added tax. Any more on it is deemed unnecessary. A few in the administration have conceded that the cumulative effect will be quite heavy on the consumers. However, the list of items outside the VAT net is very interesting and speaks of the highly inventive mind of the finance minister. The list suggests that he is encouraging diversification of investment in Bangladesh of such items that were not very common in this country. One wonders why donkeys find a place in the list of items exempted from VAT. Haven’t we enough of those amidst us, especially in some particular niche, without offering incentive for more import of it? Or for that matter mares and stallions. He also perhaps wants to encourage breeding of horses and mares, replicate some countries in producing the best mares and best stallions! A good prospect of stud farms in the country and new avenue of export. Innovative indeed!
In suggesting increase in excise on bank accounts upward of Tk 1 lakh, his argument that anyone having more than Tk 1 lakh in the bank is “rich” and therefore can pay the enhanced rate is in contrast to his position on the ‘robbery’ of banks when he said Tk 4,500 crore is a pittance, referring to the defaulting amount of several banks and a business house of poor credentials but strong links, as if that was peanuts. Increase in the said excise duty will make banks lose their claim as a good option of saving to the middle income group. Is it not a regressive act that will cause people to shy away from banks?
By the way, not many people were aware that they were already paying Tk 500 on this account, perhaps because there was an element of surreptitiousness in this matter, and I for one was not aware of it, because such deductions did not appear clearly in my yearly bank statement, or I may have failed to notice it because it was lumped with the other deductions that the bank makes for providing us its services.
Defaulting business houses and non-performing state-owned banks have caused these to dip in the red by nearly Tk 15,000 crore, part of which the finance minister wants to recoup through subsidising. In fact in doing so the finance minister is indirectly subsidising robbery through what he euphemistically calls ‘recapitalisation.’ And nothing palpable has been done to pull up the banks whose management as well as the boards have been complicit in the pilferage of public money to fatten a coterie of self-serving people.
These banks have become like a bucket full of holes — no amount of refilling will help without plugging the holes. And neither the government nor the banks’ management is willing to do that.
The finance minister says the prices will not go up in spite of the taxes, and he is hopeful that the VAT would help bring into the tax net more people. It is absurd to rely on VAT and subsidiary duty when only 40 percent of TIN holders pay tax.
And prices have already started spiking. For example, iron rods have become dearer by more than Tk 3,000 per tonne even before the budget is passed.
We have lost count of how many times the price of gas has been hiked in the last five years, and the finance minister has rubbed salt in the wounds of the suffering public by announcing in advance that 2018 will see another rise in gas price.
Price increase in Bangladesh is not governed by the market. It is arbitrary and sometimes whimsical. It seems that the service providers have become business houses interested in profit-making rather than reducing the burden of the common people. For example, the BPC in the last three years ran up a profit of more than Tk 20,000 crore and only once in the last many years has the price of octane been reduced.
The month of Ramadan comes as a blessing for us. But what sort of “blessing” is the finance minister giving us? Every year I look forward to this month with a mixed feeling, and even more, with trepidation, because that is the time when the traders go on a profiteering binge, undeterred by government caveats and unaffected by the market forces, or religious diktat. In spite of goods aplenty, the common refrain from the traders is, there is not enough of the stuff in the market. It is as if the traders, large and small, are consumed by the monster of selfish profiteering, making the most of it in the 30 days of the month of Ramadan.
GDP should also be juxtaposed with GNH or Gross National Happiness. As economists say, the merits of an action should be assessed according to how much happiness it produced. The same should apply to a budget. Has our budget made the common people happy?
Source: The Daily Star
