Budget 2024-25: Too few rich, so better to tax the poor right?

It's always a bad idea to bite the hand that feeds us. In a sheer display of its foresight, the government stuck to this adage in its latest budget, ensuring the totally-proven trickle down nature of capitalist economy holds up. 

In the national budget for the fiscal year 2024025, the rich have been left relatively comfortable. 

They are untouched and undisturbed. 

And why not? Afterall, the World Inequality Report 2022 showed that only 1% of Bangladesh's population held 16.4% of its total wealth.

Imagine becoming an inconvenience to people who hold such sway. As if we commoners don't already bother them with our incessant demands for living wages and bearable prices of goods and services. 

On the surface, the national budget for the fiscal year 2024-25 almost looks like what it was supposed to be: contractionary, with a supposed leaning towards a progressive taxation system. 

Afterall, the government did hike the maximum rate of tax from 25% to 30%, a long-held demand. It's like how the rapper Notorious B.I.G so eloquently put it: mo' money, mo' problems. 

Except of course, this 30% meant just going back to post-pandemic levels. 

Remember the pandemic? The same one a couple of years ago which created a new billionaire every 30 hours, according to Oxfam? If we didn't have the pandemic, we would have a lot less billionaires. What kind of world would that even be? 

So going back to 30% isn't really doing much, just as the plan should be.

In other areas, the uber rich remain completely undisturbed.  

For instance, the surcharge-free limit of wealth remains at Tk4 crore, with no changes to the rate made whatsoever, even at a time when the government plans to increase revenue collection.  

According to the National Board of Revenue (NBR), the rich have to pay a 10% surcharge if their assets are worth between Tk3crore-Tk10crore, or they have more than one car, or own over 8,000 square feet of real estate in the city area.

The surcharge rate is 20% for those whose assets worth from Tk10 crore to Tk20 crore, and 30% for those with assets worth from Tk20 crore to Tk50 crore. 

Taxpayers with assets exceeding Tk50 crore have to pay a 35% surcharge, according to the NBR.

These rates remained constant, meaning no additional burden for the wealthy. 

In terms of luxury items, there has been no change made to the carbon tax, which deals with the ownership of vehicles. 

In the last budget, taxpayers who owned multiple cars were asked to pay an additional tax ranging from Tk25,000 to Tk3.5 lakh during the registration and renewal of a second car.

In this budget, no change was brought in this particular area. 

Afterall, why should cars be taxed higher? It's not like everyone can afford multiple vehicles anyway. 

In this regard, perhaps, the budget missed out on striking gold: Why didn't they just slap a tax on those pesky rickshaws? There's too many of them as it is. 

Another area of luxury, travel tax, was also ignored this time around. The government had planned to increase travel tax last fiscal year as well, but did not do so. The rich spend so much time boosting our GDP and levels of inflation, they do need to unwind. 

And when you reach their level, you can never unwind in a backwater place like Bangladesh. 

Hotels in Bangladesh don't even have a proper jacuzzi, let alone a seven-star. 

And what about a Michelin restaurant? Forget about it. Everyone knows comfort food helps with stress levels, but are we really expecting the rich to relax with a plate of Tk50 fuchka? Get out of here.

The travel tax remains at Tk500 - Tk4,000, depending on destination. But rest easy you brokes, you will never see that Tk4,000 tax anyway.  

To make lives even easier for the rich, the government has generously re-introduced the black money whitening scheme. 

This is being done to discourage money laundering and tax evasion. 

How it works is the money on which the rich evaded tax or laundered can now be totally legal through a payment of a 15% flat tax. 

Once the tax is paid, the money is clean. And the rich won't do it again.

Once they are paying the tax, the government will not also ask any questions about the source of money. There's an amnesty on offer as well. 

Does it really matter where the money came from as long as a tiny portion comes back to us? Trickle down, remember?

And now for the paupers, who will be footing a generous chunk of the Tk5,41,000 crore revenue. 

Where YOU come in

Ok, since you aren't rich, you obviously have to grind a bit harder. 

Most of the ways the government expects to make money from the bread crumb hoarders is actually beneficial for them. 

For example, there will now be a 15% flat VAT and supplementary duty on sugary items, including ice-cream and juices. 

Sugary food items will see a higher rise. 

The minimum tax rate on cakes, biscuits, chocolates, jams and jellies, juices and ice cream is set to rise to 5% from the existing 0.6%. 

In a study conducted by the peer-reviewed and open-access scientific journal BMC Public Health, it was shown that low-income earners are usually associated with poor quality dietary intake. They consume fewer fruits, sticking to fake fruit juices, and consume more sugar-sweetened beverages. 

They also eat a lot of trashy cake.  

There's also the tax on tobacco. The American Lung Association says people living in poverty smoke cigarettes more heavily and smoke for nearly twice as many years as people with a family income three times higher in comparison. 

This sin tax is of course geared towards curbing the bad habit of smoking. 

Better to save what little money you have to improve your lives. 

Another area of increased tax is mobile talk time and internet usage. 

Perhaps low income earners spend too much time on their phone. While that can't be conclusively proven, research has shown that low-income groups are far more reliant on their mobile phones for the internet. 

Access to a smartphone and a Sim card with the internet is much easier to come by than a laptop/desktop and a broadband line. Smartphones are also cheaper in person. 

The increase in this tax will impact low-income groups disproportionately than their higher-income peers. It will also help them stop wasting their time on Facebook and get a job instead. 

Then there's the increased VAT on entertainment services provided in amusement parks. 

The VAT will be 15%, up from 7.5%. Obviously no one with a respectable income goes to a Bangladeshi amusement park. I doubt most of us even know if there is an amusement park in the country.

According to the Bangladesh Association of Amusement Parks and Attractions (BAAPA), there are currently around 300 amusement parks and theme parks across the country, 100 of which are members of the association. Most busy people, like the rich, have obviously never seen any of those.

But it's yet another waste of time, so better to tax people who aren't contributing meaningfully to the GDP. 

As for the price of goods, well you can't really set that. 

The syndicate punishes both the rich and the poor. Where some only eat vegetables as they can't afford chicken, others consume only two pieces of the Ayam Cemani variant, the more expensive Black chicken. 

See, equal treatment for all.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.