Sadly, budget set to be conventional: Debapriya

The new budget appears to be yet another conventional one, lacking any fresh initiatives such as recovering defaulted loans, repatriating laundered funds, or significantly widening the tax net, said Debapriya Bhattacharya, distinguished fellow at the Centre for Policy Dialogue (CPD) and chair of the White Paper Preparation Committee.

"Incorporating funds recovered from past corruption, bank scams, tax evasion, and laundered money under the previous government could have been a novel source of revenue for this budget," he said while addressing a pre-budget shadow parliament session, organised by Debate for Democracy at the FDC auditorium in the capital today.

He also highlighted the risky pressure of external debt inherited from the previous administration.

"One of the notable achievements of this government has been the repayment of $5 billion in foreign loans, which had been growing by billions annually," he said.

He acknowledged that the government has made progress in managing external finances, remittance inflows, export performance, debt obligations, reserves, and exchange rate stability.

However, Debapriya expressed concern over inflated and mismanaged development projects, claiming that nearly 40% of expenditures in such projects are fake.

"Projects that previously drained resources remain ongoing. If revenue spending is not managed properly, it discourages taxpayers. Our tax structure remains inequitable," he added.

He further stated that while some stability has been achieved in the external sector, the private sector still lacks the expected level of investment and economic stability.

Debapriya has suggested collecting revenue from tax evaders, loan defaulters, holders of black money, and money launderers – along with proceeds from the sale of their confiscated assets – under a category he termed as an "oppression tax" or "corruption tax".

"If this money could be brought in as revenue under the name of an oppression tax or corruption tax, it would contribute to building a moral economy. Even if this doesn't happen in the upcoming budget, it will need to be done in the future," said the economist.

Additionally, he advocated for holding national parliamentary elections quickly.

"We urgently need a functioning parliament. The government is discussing many other issues with political parties. However, the government has not held any discussions with political parties regarding the formulation of next year's budget," said Debapriya.

"If the budget were formulated through discussions with them, the government's initiatives in the budget would have continuity, and business confidence would also increase," he observed.

He said elections are necessary to maintain economic stability and ensure policy continuity for private sector investment. 

"During investment conferences, investors have asked us whether the political government that comes to power will maintain the continuity of the reforms this government is implementing," he added.

Terming the next budget a conventional one, he said, "85% of the country's wealth has gone to 10% of the people, but as always, this time, too, the budget is dependent on indirect taxes."

Debapriya said the interim government is taking all its deficit financing loans from banks, noting that taxpayers won't be encouraged to pay taxes if transparency cannot be brought to government expenditure. 

"They cannot spend foreign financing. Banks are already very weak. If the government takes so many loans from banks at this time, credit flow to the private sector will be hampered," he added. 

At the event, Hassan Ahamed Chowdhury, chairman of Debate for Democracy, presented some recommendations for increasing revenue collection in the upcoming fiscal year. 

Two teams from Ananda Mohan College in Mymensingh and Bangladesh University of Business and Technology (BUBT) in Dhaka participated in the debate competition.