Tax net expansion, subsidy cuts should be priorities for next budget: Debapriya
He said concrete steps should be taken to expand the tax net by strengthening enforcement and improving compliance.
Expanding the tax net, phasing out exemptions and rationalising subsidies should be among the key priorities for the next national budget, economist Debapriya Bhattacharya has said.
Speaking at a dialogue titled "Thoughts on the First Budget of the New Government", organised by the Citizen's Platform for SDGs Bangladesh in Dhaka today (31 March), he outlined a set of measures aimed at increasing fiscal space from both revenue and expenditure sides.
On the revenue front, Debapriya stressed the need to gradually phase out tax exemptions, noting that such measures would help improve revenue mobilisation without introducing new tax rates.
Keep updated, follow The Business Standard's Google news channel
He said concrete steps should be taken to expand the tax net by strengthening enforcement and improving compliance.
Improving tax collection without raising new tax rates should be a priority, with a stronger focus on ensuring compliance, he said.
He also identified new areas for taxation, including property tax, as potential sources of revenue.
In addition, Debapriya highlighted the importance of generating income from state-owned banks and enterprises, as well as offloading shares of profitable state-owned enterprises, banks and multinational companies.
He further stressed the need to prioritise the recovery of stolen and non-performing assets, both domestically and internationally, through technical, legal and diplomatic efforts.
On the expenditure side, the economist called for the rationalisation of subsidies to reduce fiscal pressure.
He suggested that cash incentives for remittances and exports could be phased out in two stages – an immediate adjustment followed by further changes from the beginning of the next fiscal year.
Debapriya also recommended reforms in public sector wages and pensions to ensure long-term sustainability.
He said the government should adopt a sustainable deficit financing strategy, while also undertaking reforms of state-owned enterprises to reduce reliance on government bailouts.
In addition, he pointed to the need to identify and contain contingent liabilities, which often create hidden fiscal risks.
He said a balanced approach to both revenue generation and expenditure management would be essential to create the fiscal space required to support economic stability and future growth.
