Editorial
National budget 2007-08 takes effect
Govt braves the challenge to implement it
The budget as proposed by finance and planning adviser Mirza Azizul Islam on June 7 received presidential assent on June 28 with minor modifications incorporated in it in what looks like partial response to points raised by various stakeholders through the internet and media. By virtue of an ordinance, the Tk 87,137 crore budget has taken effect from July 1. It is worth noting that the budget outlays, both revenue and development, revenue receipts and expenditure targets as envisaged in the original proposals remain unchanged. Most of the changes relate to customs duties whilst there are some in VAT and income tax areas. The provisions for duty-free import of newsprint for newspaper industry, reduction of duty on computer and textile machinery together with retention of zero tariff on essentials like rice, wheat, edible oil, onion, lentils etc and fertilizer as a production input are welcome adjustments in the duty structure. The finance adviser is for a three-pronged strategy to bring down prices: zero duty on imported essentials as enumerated above, replenishment of supplies by government procurement, mainly through import and raising the level of agriculture productivity and setting up of alternative markets. Simultaneously, one would like to see incentives given to new importers aimed at loosening the grip of a handful of importers on the market. Also it must be ensured in the interest of productivity that subsidies reach the poor farmers. The protection of local industries is vital for employment generation. The adviser thinks that even though as a result of the budgetary steps, the profitability of the local entrepreneurs will be somewhat reduced that by itself shouldn't be construed as a disincentive for the local industries. Let's not forget that the government looks upon the private sector as a big source of employment generation. A net 17 percent increase in revenue collection has been targeted in the present budget. According to the NBR chief taxation procedures have been simplified and made more transparent. The discretionary powers of tax officials have been reduced. All these steps are likely to increase revenue collection, so he believes. Significantly, two ongoing steps hold out a prospect for generating sizeable revenues. First, the government's offer to tax evaders to come forward and pay their dues at 5 percent rate of interest to legitimise their money by 31st July or else suffer penal rate should now be taken by the concerned persons seriously. Admittedly so far, the response has been lukewarm. Secondly, there is a good potential for revenue generation in the NBR's recent drive which has already netted 1800 tax-payers in Dhaka city. When the drive is expanded to cover the other cities and towns the tax net would be widely cast. The stashed away money being now recovered could also be a shot in the arm of our cash-strapped budget. We suggest a new head be opened for it with the figure made known to the public.
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