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Though the businesses and the revenue board complement each other in mobilising resources to continue the country’s development and tackle economic headwinds, business leaders often express displeasure with the revenue officials for not to implement their recommendations made in the pre-budget discussions.
It is mentionable that the business communities contribute the most to the national exchequer by paying their taxes while the National Board of Revenue (NBR) collects the country’s around 85 per cent revenue.
Even though a proactive attitude towards others and co-relation among them is a must to overcome any difficulties in the country’s resource mobilisation, the relation gap between them is ultimately resulting in a shortfall of revenue every year.
This situation also creates complexities in policy implementation and increases domestic and foreign borrowing that is directly fuelling inflationary pressure and reforms of such things which are not made timely due to lenders’ prescriptions such as a reduction of fuel subsidy put the citizens under more pressure.
Experts and business communities say that this year is not similar to previous one. More economic strains are lying ahead and there is no scope for an ambitious budget for FY24 due to inflation, energy crisis and global economic headwinds triggered by Russia-Ukraine war and added by bank failures in the USA.
Amidst the ongoing crisis, if the NBR chairman and its officials don’t pay heed to the advice of the business communities, it may affect the policy formulation in the upcoming budget and it would happen that the business communities’ voice and the consumers’ demands are totally ignored in FY24 which can affect the country seriously in the near future.
If the country loses more revenue from the industries, the government cannot invest money in the development projects and cannot provide policy support towards industrialisation that will eventually weaken the national exchequer.
And if revenue collection drops, the country will seek loans from foreign lenders or take budget support and aid–which may prescribe unnecessary reforms–or the country will go for domestic borrowing from the central bank or commercial banks. Borrowing from Bangladesh Bank is likely to be injected into the economy, which may fuel inflation.
Why business leaders express dismay against NBR?
Former president of Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Md Shafiul Islam Mohiuddin, ex-FBCCI president AK Azad and current FBCCI President Md Jashim Uddin have expressed unhappiness with the NBR in most of the discussions on policy, budget and their challenges and demanded taking measures to tackle them.
The leaders at a pre-budget discussion organised by Dhaka Chamber of Commerce and Industry (DCCI) and The Daily Samakal at Bangabandhu International Conference Centre on March 22 claimed that NBR officials don’t meet their demands and don’t formulate policies conducive to industrial growth.
The NBR officials even don’t write meeting minutes, and the business communities don’t see any reflection of their recommendations in policy formulation, they added.
The business leaders expressed discontent with the officials, especially NBR chairman, saying, “No one from NBR is present at the discussion meeting. What do they think of themselves? They may be high officials of the government but they are still serving the country.”
Some business leaders also shared their views saying that they were missing late finance minister AMA Muhith because he used to attend the business community’s discussion meetings and take notes. Even former NBR chairmen would attend the meetings and take their suggestions into consideration for formulate business-friendly policies.
They have also expressed unhappiness as the incumbent finance minister was not present at the discussion meeting on Wednesday. The NBR chairman also had neither attended the meeting nor sent any representative.
They also criticised the government for appointing ‘outsiders’ as NBR chairmen on a contractual basis who spend half of their tenure on learning tax, customs policies and NBR’s operation.
Earlier, the businesses expressed displeasure at a budget consultative meeting where the NBR chairman and its officials were present. The revenue board and the apex trade body FBCCI organised the meeting last year.
Former Metropolitan Chamber of Commerce and Industry (MCCI) president Barrister Nihad Kabir at a revenue conference organised by NBR in February this year expressed her dissatisfaction.
Nihad Kabir hope that the revenue board would take their suggestions into consideration for policy formulation, saying that in most cases, NBR does not consider the business leaders’ views and demands.
The former MCCI president used to skip the meeting with NBR as no reflection was seen in the policy, she said.
Bangladesh Garment Manufacturers and Exporters Association president Faruque Hassan also expressed the same view against the NBR at “Made in Bangladesh Week 2022”. “NBR officials harass the businessmen in every step which is the main obstacle to doing business. We seek PM’s intervention to reduce such vexations.”
NBR’s position in this context
NBR Chairman Abu Hena Md Rahmatul Muneem at some pre-budget discussions said that the business leaders urged them to ensure such facilities. “These can help them but can badly affect local or other sectors and industries.”
Muneem also questioned over the business communities’ demand for duty-free imports of office stationary and chairs, though these are manufactured locally. “Why will wooden chairs be imported from abroad?,” he further questioned.
He stressed the need for reducing tax benefits from imports which are also produced locally in a bid to extend support for domestic production. “We also need to look at local industries.”
The board chairman also said that the sector people demand at their point and do not analyse the other effects from the policy changes, rather the NBR tries to assess and evaluate the sectors’ recommendations with a macroeconomic perspective. By implementing those, what changes might happen in the country’s overall revenue collection and the other related sectors.
Bridging the gap between businesses and NBR is a must
By analysing the practices of the business communities and the government officials, it would be seen that sometimes they are playing role at their point of views and do not look at others.
The business leaders placed such demands that help them but affect the other sectors. In contrast, the revenue officials also make such complexity that creates harassment, loses time and money, and leaves the industrialisation under slower growth.
The experts and insiders, in that context, prescribed to make taxation simpler, digitalised and integrated so that the meetings between officials and the businessmen reduce in tax return filing, auditing and even hearing.
Besides, the NBR has to listen first everyone’s note, though they have a difference of opinions and they will try to find a common ground, which should be in the interest of the country. The revenue board can mostly play a pivotal role in reducing complexities of doing business and formulate an easy and simple policy for creating business-friendly environment.
This move will ensure the community people’s voice over the policy formulation to meet revenue collection target, reduce dependency on borrowing, and ensure economic growth with taming inflation.
