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No headway in taking Dhaka’s internet, satellite TV overhead cables underground
Despite repeated efforts by the Power Division, no progress has been made in bringing the distressing overhead internet and satellite TV cables underground although power utilities are implementing their project in this regard.
It has even not possible to make the operators of internet and satellite TV cables agreed to join the ongoing underground cabling projects of the power utility bodies.
According to official sources, Dhaka Power Distribution Company Limited (DPDC) has been implementing its first project in the Dhanmondi area to take its all overhead transmission lines underground.
“But despite repeated calls by the DPDC, no internet or TV cable operator agreed to join the project. They were even offered free of cost to join the scheme. But no response was received,” a top official of the Power Division told UNB.
In such a frustrating situation, recently the Power Division reconstituted its previous committee and also convened a meeting to find a solution to it. But finally the meeting was not held for unknown reasons.
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Member secretary of the reconstituted committee and director of the Power Cell Md. Salim Ullah Khan informed that the power Division’s efforts will continue.
“But the other departments and agencies are not interested in cooperating with the Power Division’s efforts in this regard,” he told UNB.
Sources at the Power Division blamed the Nationwide Telecommunication Transmission Network (NTTN) and internet service providers (ISPs) for the horrible situation of the overhead cables.
After a number of meetings, the previous committee of the Power Division found it difficult to address the problem without their cooperation.
According to its report submitted to Power Division, Summit Communications Limited (SCL) and Fiber@Home (FAH) have been working as NTTN in the city and they laid underground cables for operating their main internet network in the city while some 1734 legal and some 5,000 illegal internet service providing (ISP) companies have been operating as local ones to provide internet connections to homes and offices through overhead cables.
As per the system, the ISPs are supposed to take connections from SCL and FAH to take internet service to homes and offices from the main network. Recently, Bahon Limited, another NTTN company, also joined the network.
But NTTN companies alleged that the ISPs are not taking connections from Label Distribution Protocol (LDP) or Access Point (AP) installed by NTTN as it will cost them financially, says the report.
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On the other hand, the report reveals, the IPS companies alleged that they do not prefer taking connections from LDP or AP as they do not get required and instant solutions from the NTTN companies if any problem takes place in any internet service connection.
Besides, the NTTN are charging excessively in providing connections to the ISP companies from their LDP and AP, the report mentions quoting the ISP companies.
Under the circumstances, the ISP companies are hanging overhead cables indiscriminately and giving connections to homes and offices without following any rule or regulation, the report says, adding that only the Bangladesh Telecommunication Regulatory Commission (BTRC) can step in and resolve the conflict.
Finally, the committee adopted an 11-point recommendation to have a solution and take all overhead cables underground through coordination with electricity distribution companies —DPDC and Desco.
The committee found that the haphazardly hanged internet, security and satellite TV cables are not only posing a great threat to the power distribution system, but also creating a major obstacle to the government’s move for the beautification of the capital.
Rashed Amin Biduyt, an official of the Bahon Limited, said they are not joining the DPDC underground cabling project due to technical reasons as it will not fulfill its requirements to facilitate connections to ISPN.
"But we're laying our own cables underground with the permission of the South City Corporation," he said.
Read more: Installation of underground cables completed in Hatirjheel area
JU students demand medical faculty that may benefit around 1 crore people in adjacent areas
On April 13, 2019, when Jahangirnagar University campus wore a festive look to welcome Pahela Baishakh, Nuruzzaman Nivrit, a 45th batch student of English department, went to the university medical centre with chest and stomach pain. As his condition turned complicated, he was referred to Enam Medical College Hospital in Savar at around 9:15 pm. However, he died on the way to the hospital.
“I want to live. Help me to live, give me some money,” Md. Nazrul Islam, an employee of Al Beruni Hall of Jahangirnagar University, requests all. He is suffering from liver cirrhosis. He has been undergoing treatment at the Super Clinic for the last few months.
Not only Rashed or Nuruzzamn, many other students of university suffer sometimes due to lack of proper treatment, sometimes for not getting an ambulance.
Every time there has been a movement to improve the facilities at the medical center after death due to negligence. There were also assurances too from the authorities concerned. But, none of the 13-point demand students raised after the death of Nivrit has been implemented.
Files for improvement of infrastructure and equipment of the medical center are lying in one corner of the concerned office, alleged students.
They said they need an international standard medical faculty and specialized hospital on the campus.
Talking to UNB, some students said if a specialized hospital is established with laboratories and labs and higher degrees in medicine are provided, students, teachers and staff on the campus will get better treatment and death by negligence can also be prevented.
Besides, about one crore people of Savar, Dhamrai, Manikganj, Gazipur and Tangail regions will be able to avail the health service at a low cost, they said.
According to Scopus, Elsevier's abstract and citation database, 837 articles on medicine have been published in international journals since establishment of JU . Of these, 237 research articles have been published from 2022 to September 17 this year. As a result, researchers have urged the authorities concerned to establish a specialised faculty.
Professor Nuh Alam, acting dean of the Faculty of Biology of JU, said, "Our five departments are directly related to medical services. Naturally, research on these topics is increasing. In that context, there is a need for a full-fledged medical faculty.”
General Secretary of JU Teachers' Association Prof Dr M Shamim Kaiser stressed the need for a specialised hospital alongside medical faculty to move up in the global ranking.
Prof Dr Sohel Ahmed of the Department of Biochemistry and Molecular Biology said that the talented and skilled students of Pharmacy, Microbiology, Biochemistry and Genetic Engineering departments of the university are going abroad after completing their studies due to lack of good opportunities.
If an international standard hospital and laboratory are established here, teachers and students will be able to make a big contribution to research alongside medical services, he said.
There are several big government institutions including Bangladesh Public Administration Training Center, Bangladesh Livestock Research Institute near JU.
Besides, about 1crore people live in Savar, Ashulia, Dhamrai and Gazipur industrial areas who don’t have access to advanced treatment due to lack of good hospitals.
Resident Medical Officer of Manikganj Sadar Hospital Kazi AKM Russell said, "There is no advanced medical facility in the region. So patients with complicated problems are sent to Dhaka. If a good healthcare facility is established in this region with the help of the government, there will be opportunities for research and higher education and patients will get better services at a lower cost.”
JU Vice-Chancellor Prof Dr Nurul Alam said, "We are thinking about the importance of a medical faculty and specialized hospital. The matter has already been discussed with the government. Once the ongoing project is completed, necessary steps will be taken.”
Grid integration guideline fails to make a success of solar irrigation
The government's guideline for purchasing electricity from solar irrigation pumps failed to draw adequate response from stakeholders thus the government is now thinking of forming a high-powered inter-ministerial committee involving concerned ministries and entities in the sector.
According to official sources, the Sustainable and Renewable Energy Development Authority (Sreda) published a policy guideline titled: "Grid Integration Guideline for Solar Irrigation Pump" in July 2020.
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The main purpose of the guideline was to facilitate solar pump operators to sell their idle electricity to distribution entities and also the distribution entities' purchase of electricity from pump operators under a specific policy.
The idea of purchasing electricity from solar-run irrigation pumps came from the government's success in purchasing power from rooftop solar plants installed in office and industrial buildings, SREDA officials said.
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During the off-season, the government will buy electricity from the solar irrigation plant operators. Under the plan, pump operators will be able to sell their idle electricity to the national grid using local distribution grid lines.
But "Grid Integration Guideline for Solar Irrigation Pump" failed to make any significant breakthrough in setting up solar irrigation pumps to replace the diesel-fired pumps.
So far, about 6000 pumps, out of 1.34 million diesel fired pumps, were converted to solar-run pumps, said a SREDA official.
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But the stakeholders do not agree with such figures. Dipal C Barua, who is deeply involved in solar irrigation and has been implementing a number of projects in Kustia and Dinajpur districts, said so far about 3000 irrigation pumps were set up across the country.
He, also former president of Bangladesh Solar and Renewable Energy Association (BSREA) said that replacing the diesel-fired pumps with solar-pumps reduced the cost of irrigation by 40-50 percent.
"For a crop season, farmers now spend Tk 2000 for a land while they had to pay Tk 4000 for irrigation by diesel-fired pumps," he told UNB.
But such a project is individually not attractive for a single farmer and also for distribution companies to buy idle power, he observed with his experience of installing about 30 irrigation pumps in Pabna.
There must be a unique business model to make the solar irrigation initiative where it will be lucrative for both pump operators, formers and utilities, he said.
Expressing a similar opinion, a senior SREDA official said the Power Division is now thinking of forming an inter-ministerial committee to evolve a business model to make the solar irrigation project successful.
Recently, the SREDA organized a meeting to discuss the overall situation of the solar irrigation pumps.
In the meeting Prime Minister's Energy Advisor Dr Tawfiq-e-Elahi Chowdhury directed the officials in the power sector to set a target under a specific plan to convert the country's diesel-fired irrigation pumps into solar-run ones.
"You have to set a goal under a plan to increase the number of solar-run pumps in irrigation," he told SREDA officials.
He also advised the farmers not to use excessive water than required for the irrigation.
State Minister for Power, Energy and Mineral Resources Nasrul Hamid also addressed the event at the SREDA office.
The energy advisor said that a committee will be formed after Eid from the Prime Minister's office so that an effective role can be played in reaching the desired goal in the renewable energy sector.
Emphasizing the mobilization of the climate fund, he said there should be an initiative to collect promised amounts of money from the Loss & Damage Fund announced in Cop-28.
Nasrul Hamid said there should be united efforts for promotion of solar irrigation pumps. Reducing the use of diesel pumps will also reduce carbon emissions.
Each diesel pump consumes 1023.34 liters of diesel per year,” he said, adding, the government has to import huge quantities of diesel which is a waste of foreign exchange and also harmful to the environment.
Eid shopping dampened: Rising costs hit Keraniganj's wholesale clothes market
In the bustling Keraniganj wholesale clothes market near Dhaka, traders are grappling with dwindling profits and a significant drop in customer footfall as Eid-ul-Fitr approaches. This year, the festive fervor is markedly subdued, a sharp contrast to the usually vibrant pre-Eid shopping spree.
Historically, the market thrived with shoppers from various areas, buzzing with activity before Shab-e-Barat. However, this season, the scene has shifted, primarily due to escalating commodity prices affecting the Eid market. Retail buyers are sparse, and those who venture out purchase less than they traditionally would.
A visit to the market revealed a noticeable hike in clothing prices across the board, ranging from Tk 20 to Tk 300-400 based on the quality. From shirts and pants experiencing a Tk 50-100 increase to Chinese T-shirts hitting the higher end of Tk 300-400, the inflation has been broad and unforgiving.
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Govt initiatives aim to simplify tax system and enhance revenue collection through technology and policy overhaul
In a strategic push to revamp its tax policy and administration, the Bangladesh government has outlined plans for significant reforms aimed at making the system more effective and taxpayer-friendly in the medium term (2023-24 to 2025-26). According to the Medium Term Macroeconomic Policy Statement (2023-24 to 2025-26) by the Finance Division of the Ministry of Finance, these changes are integral to achieving the nation’s development objectives.
The government acknowledges the urgent need to generate ample revenue to support Bangladesh’s development ambitions. “Several initiatives are underway to make tax administration taxpayer-friendly and transparent by expanding the scope of digitalization and automation in tax registration, return submission, and tax payment,” the policy statement highlights.
A critical area of focus is the scrutiny and rationalization of existing tax exemptions. The statement underscores the government’s intention to align tax collection practices with the needs of local industries and to ensure fiscal preparedness for unforeseen global challenges, drawing lessons from recent global events.
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Moreover, the pursuit of revenue growth extends beyond tax reforms to tapping into non-tax revenue (NTR) sources. The expansion of public services and the notable rise in household incomes over the past decade present new opportunities for revenue mobilization, the statement elaborates. Initiatives such as the introduction of a digital payment system aim to facilitate easier access to public services, thereby enhancing NTR collection.
Efforts to improve dividends and profits from state-owned enterprises through efficiency and profitability measures are also in motion. With an ambitious revenue target of Tk 5872 billion and Tk 7097 billion for the fiscal years 2024-25 and 2025-26, respectively, the government is keen on leveraging digital advancements to simplify tax payments.
Despite Bangladesh’s remarkable economic growth, the pace of revenue mobilization has not matched, underscoring the need for a more robust revenue framework to support the country’s long-term development goals. Bangladesh aspires to transition to a higher middle-income status by 2031 and achieve developed country status by 2041, with the ‘Perspective Plan of Bangladesh 2021-2041’ targets to elevate the revenue-GDP ratio to 19.55 percent by 2031 and 24 percent by 2041.
The statement said that a large share of the revenue comes from the direct (income tax) and indirect taxes (VAT and customs) collected by the National Board of Revenue (NBR).
Non-NBR taxes and non-tax revenue (NTR) constitute smaller parts.
Although there has been some progress over the years to be less reliant on trade taxes and the share of direct taxes has increased to some extent, there is still ample room to improve.
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Addressing the reasons behind low revenue collection, including economic informality, structural inefficiencies, and cultural attitudes towards taxation, is seen as vital. The government, in collaboration with the private sector, is focused on simplifying tax compliance, increasing transparency through digitalization, and adopting progressive taxation principles.
Success in revenue collection will be strengthened by making the tax administration easy to approach, increasing digitalization to bring in transparency and predictability and bringing in progressive taxation where the affluent pay a higher part of the taxes, the Medium Term Macroeconomic Policy Statement (2023-24 to 2025-26) of the Finance Division of the Finance Ministry said.
Old Dhaka's Iftar bazar heats up, even as prices pinch
As the month of Ramadan started, the bustling streets of Old Dhaka came alive with the aroma of spices and the sizzle of frying pans. The Iftar bazars in this ancient section of the capital are a battleground for traditional dishes vying to be crowned the ultimate feast to break one's fast.
Amongst the labyrinthine lanes of Chawkbazar, Islampur, Bangla Bazar, and the roadside tong shops, vendors engage in a spirited rivalry to tantalize the taste buds of the devout.
Chawkbazar stands as a bastion of tradition in the realm of Iftar markets, offering a cornucopia of culinary delights. Here, amidst the throng of eager patrons, one can find an array of Iftar staples: chickpeas, piaju, puri, chop, and juice, alongside a plethora of innovative creations.
The alleys of Islampur and Bangla Bazar also boast diverse assortments of Iftar treats, showcasing the rich culinary heritage of the region.
Central to the charm of Chawkbazar is the legendary 'Boro Baper Polay Khay' Iftar, a concoction steeped in tradition and flavor. Comprising an eclectic mix of 15 ingredients, including chicken, minced meat, cotton kebab, and an assortment of spices, it embodies the essence of Old Dhaka's culinary heritage. Priced between Tk 800 to Tk 1200 per kilogram, it stands as a testament to the enduring appeal of tradition.
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However, a newcomer to the scene, 'Shob Baper Polay Khay,' poses a formidable challenge to the reigning champion. Vendors tout its credentials, proclaiming, "This is the traditional food of Dhaka, the best of Chawkbazar." They claim that their food has a 78-year-old tradition.
Kebabs reign supreme in this gastronomic arena, with vendors proudly presenting an assortment of tantalizing options. From Tengri Kebab to Suti Kebab, Sheek Kebab, and Kathi Kebab, the choices are as diverse as they are delectable. Whole chicken roasts, quail roasts, and succulent leg of goat roasts vie for attention alongside savory beef haleem and fragrant biryanis. Vegetarian offerings such as vegetable naan, milk naan, and keema paratha cater to diverse palates, while vendors employ persuasive advertising tactics to attract discerning buyers.
‘Squeezed middle’ in urban areas bearing brunt of Ramadan price hike
The runaway price hike during this year’s Ramadan is proving particularly difficult for the middle to lower-middle class households in urban areas, for whom a Tk10-15,000 spike in the monthly spend is a big ask.
These are the families that despite living in or near areas where supershops are proliferating, still prefer to buy from the local kaachabazars (kitchen markets). And the principal breadwinner, usually the father, often prefers to visit the bazar and make the purchases himself.
One of them, Kazi Shariful Haque, a job holder at a private local company, told UNB that in any case one has to spend more on food during Ramadan, despite it being the month for restraint, on the food that is consumed during Iftar and Sehri. Consumption of some items like fruits, beef, and mutton, does come down, he conceded.
UNB spoke to Shariful at Kawranbazar, the principal kitchen market in the capital, which he visited just prior to the weekend with a shopping list that contained fruits, vegetables, fish, and chicken, among other things.
He shared that in his experience, most items’ prices jumped by Tk10-30 per kg. Fish prices jumped by Tk100 to 150 per kg, chicken jumped by Tk15 to 20 per kg, while chick-pea, lentil, onion, and garlic ginger are among the items that saw prices jump by Tk10 to 30 per kg, since the start of Ramadan.
Ramadan: Holiest cities Makkah, Madinah flooded with Umrah visitors
Dates are not available at price set by the government, he said, while apples, malta, and some other fruits are selling at Tk300 to 350 per kg - an increase in the price by Tk 50 per kg. Medium-quality dates are selling at Tk800-1000 per kg, he pointed out.
However, Shariful has found that the prices of rice and edible oil are stable for now, but of course household expenses are not limited to the spending at the bazaar only. In almost every sphere, including medicines (health), water rates, gas rates, electricity, house rent, people are having to spend more and more.
Bills and prices are squeezing the middle class in cities, especially at the lower end like Shariful, who last received a raise at his company two years ago, and in these two years, inflation has been spiking in the country. Even the company he worked for suffered losses in business in these two years, and it made him perceive a period of gloom for the economy.
Still, it makes him yearn for when the times were good for these very same people, as recently as 2-3 years ago.
“In 2021, I could maintain my four-member family in Farmgate, Dhaka along with spending for parents living in the village and even then save a small amount every month. And now I have to maintain family expenditure by drawing on my previous savings,” Shariful voiced his frustration in an annoyed voice.
Shariful’s is the common refrain among most shoppers at the city’s kitchen markets these days.
They make up Bangladesh’s ‘squeezed middle’, a term coined by the former leader of the opposition in the UK parliament, Ed Miliband of Labour, in the aftermath of the global financial crisis of 2009.
As Ramadan is about to begin, prices of essentials high in Khulna kitchen markets
The Oxford English Dictionary, while choosing it as their ‘Word of the Year’ in 2011, defined it as “the section of society regarded as particularly affected by inflation, wage freezes, and cuts in public spending during a time of economic difficulty, consisting principally of those people on low or middle incomes.”
All these conditions are met by the likes of Shariful, and others in his bracket.
Dr Fahmida Khatun, Executive Director of the Centre for Policy Dialogue (CPD) told UNB that inflation and randomly fluctuating exchange rates (affecting the price of imported products) have increased the cost of living in the urban areas, as the urban people are depending on supply chains..
In the rural areas, 60 to 70 percent of items consumed by a family are produced on their own land - which is emphatically not the case in the cities. Most of the middle class is even living on rented property. As a result, the price hikes tend to affect urban life more severely, she said.
Read more: Industries Minister announces special drive to control standard, prices of goods during Ramadan
Dr Fahmida said it was not only the prices of consumer goods - health-related expenditure and utility prices have also increased, confirming the observation by Shariful, and others, that UNB spoke to in Kawranbazar.
“Household incomes, mainly salaries, did not increase in the post-Covid period, after having gone down during Covid itself (2020-2022),” Dr Fahmida said. “As a result, jobholders are really bearing the brunt of the price hikes.”
Average wage growth remained well below the inflation rate in Bangladesh for the 22nd month straight in November 2023, as per the Bangladesh Bureau of Statistics (BBS), corresponding to the timeline she provided.
Ghulam Rahman, president of the Consumers Association of Bangladesh (CAB), said that the prices of all types of products have increased, whether those items are imported or produced in the country.
Although the incomes of jobholders did not increase, their expenses have increased alongside that of others, but this has proven a particular burden for the fixed income groups, he said.
He said If prices were hiked “logically and systematically”- presumably meaning adhering to market fundamentals - then this burden would remain manageable. But when it happens arbitrarily, indicating how it happens in Bangladesh, it becomes very hard for the people, said the CAB president.
He advised authorities to pay more attention to whether this is happening, as there are several instances of price gouging, hoarding, etc in the country, and there are laws against these.
Wherever irregularities are found, the perpetrators should be brought under the law, to bring stability to the market, the CAB president urged.
Read more: Commerce ministry fixes prices for dates
Ramadan: Holiest cities Makkah, Madinah flooded with Umrah visitors
Muslim devotees from across the world are coming into Saudi Arabia in large numbers taking advantage of the holy month of Ramadan contributing to huge crowd at the two holiest cities- Makkah and Madinah.
The Kingdom of Saudi Arabia (KSA) is witnessing a growing number of Umrah pilgrims from countries around the world, including from Bangladesh, since the beginning of Ramadan.
Ramadan, the ninth month of the Islamic calendar, offers the best weather, and this holy month, dedicated to prayer, self-reflection, and religious devotion, also traditionally marks the peak season to perform Umrah.
Though Makkah is well-known for its excessive hot days, surprisingly, this March offers a pleasant weather.
Thousands of Muslim devotees offered their Jummah prayers at the Grand Mosque in Makkah and the Prophet’s Mosque in Madinah on Friday (March 15), the first Jummah of Ramadan.
All the floors of the Grand Mosque and its adjacent courtyards were full of devotees, and the rows of devotees spilled over to the streets of the Central Haram area.
Many of the Muslims offered Jummah from their respective hotels, which are connected with the Grand Mosque through audio transmission.
Meanwhile, the Custodian of the Two Holy Mosques King Salman approved hosting 1,000 Umrah pilgrims from countries around the world during the year 2024.
The guests representing the fourth and final batch of 2024, which includes 250 prominent Islamic Umrah pilgrims, male and female, representing 16 countries from the continents of Europe and Asia, are visitng the kingdom to perform Umrah.
Read more: Saudi Arabia offers Nusuk platform for Bangladeshi visitors to increase accessibility and simplify Umrah Journey
Islamic scholars, journalists, students, and influencers like the founder and CEO of 10 Minute School, Ayman Sadiq; and author, speaker, English teacher Munzereen Shahid are among the Bangladesh delegation members.
"To be honest, I feel so lucky. I knew about the stories of these historical places. Now I had the opportunity to see in my own eyes," said Munzereen Shahid.
She said there is no language barrier or cultural divide here.
"I see an extraordinary unity among people. I have a desire to come again," said Munzereen who performed her first Umrah together with her husband Ayman Sadiq.
"Had the honor of visiting the King Fahd Quran Printing Complex in Madinah, where millions of copies of the Holy Quran are printed every year. Madinah is peaceful," Ayman shared his experience of visiting the historic place in Madinah before performing Umrah.
Talking to UNB, Musa Takai from New Zealand said, "It is quite unimaginable. I am grateful to Almighty Allah first and then to the Royal family for giving us this opportunity to perform Umrah."
Musa expressed his sincere thanks and great appreciation to the Custodian of the two Holy Mosques and the crown prince for graciously hosting him to perform Umrah.
He added that the kingdom always provides care and attention to the guests of Allah providing integrated services and stressed that the Custodian of the Two Holy Mosques’ Umrah and Visitation Program is a wonderful model.
Rationalisation of tax expenditures on cards for maximum benefits: Official document
The government has opted for rationalising tax expenditures which will play a useful role in collecting more revenue and ensuring forgone revenue (indirect public expenditure) is made to good use, according to an official document.
According the Medium Term Macroeconomic Policy Statement (2023-24 to 2025-26) of the Finance Division of the Finance Ministry, the collection of sufficient and accurate data would be the next step for which interagency cooperation would be essential.
“To initiate tax expenditure analysis the first step would be to clearly define the benchmark tax rate and base for income tax and VAT,” said the paper made available to UNB this week.
It is also necessary to create an exhaustive list of all different types of benefits and preferences given in VAT, income tax and customs.
The statement said that given Bangladesh’s low tax-GDP ratio, how much revenue is collected or lost and whether revenue collection growth is in tandem with GDP growth are important considerations to financing development and investment plans of the government.
The government allows various tax benefits to meet social or economic objectives, to spur growth in certain sectors or to attract investment.
“One tool that can be used to estimate forgone revenue is tax expenditure assessment,” it said.
Tax expenditures are estimates of amounts of revenue not collected due to preferential tax treatment relative to a benchmark (or reference) tax system, which is supposed to be developed on principles of neutrality, efficiency, and equity. Coverage of tax expenditures is wider than tax exemptions and includes tax exemptions, reduced tax rates, tax credits, tax holidays, tax allowances, tax deferrals etc.
Tax expenditure estimates help to identify potential avenues to ramp up revenue collection and increase transparency in the tax system by analysing the cost-benefit analysis of different special tax treatments.
Many countries have made tax expenditure assessments a part of their yearly budgetary exercise, it added.
Although Bangladesh is yet to formally start making tax expenditure estimates, the National Board of Revenue made a modest start in 2021 by conducting a tax expenditure analysis for the personal and corporate income taxes on a pilot basis. Despite a small sample size and methodological limitations, the findings of that analysis were significant: about 36 percent of GDP in 2018-19 FY was excluded from direct taxes, which translated to roughly Tk 58,000 crore worth of forgone taxes.
If one adds tax expenditure on the transfer of land, a major item under capital gains which is not covered in GDP calculation, another Tk 8,000 crore is lost as forgone revenue.
The figures added up to approximately 2.6 percent of GDP for FY2018-19.
Although tax expenditures are granted to meet certain desired social and economic objectives such as employment generation, greater access to health and education, reduced inequality, tax expenditure assessments shed light on the need to understand the tradeoff between accrued benefits and loss of revenue.
In the case of VAT, the Medium Term Macroeconomic Policy Statement (2023-24 to 2025-26) said that several sectors such as agriculture, livestock, fisheries, education, public administration, defence, and social work activities (total 21.2 percent of GDP) are outside the purview of value-added tax.
In the case of manufacturing, many industries including light engineering, household electrical goods & consumables, medicine, computer items and peripherals, export-oriented industries etc. are given preferential treatment to promote local industries, export growth and to attract investment. That’s another 23 percent of GDP.
At the retail and wholesale stage (15 percent of GDP) a substantial part is VAT exempt. A significant part of transportation services (7.5 percent of GDP) has been kept intentionally outside the VAT net to make transport costs affordable to the common masses.
At the Revenue Conference of the National Board of Revenue last year, a presentation estimated that no VAT is collected on goods and services on almost 50 percent of Bangladesh’s GDP.
Although Customs’ contribution to revenue collection may decrease in the future, it still contributes a significant portion to the government exchequer.
A closer look at the composition of Bangladesh’s imports in FY 2020-21 reveal that 15 percent of all imports were done by 100 percent export-oriented bonded factories, 7.4 percent by factories in Export Processing Zones (EPZs) and 19.8 percent of all imports benefitted from special tax treatment under SROs/orders.
In total, no customs duty was collected on 42.3 percent of total imports during FY 2020-21.
Ambitious targets: Govt aims to collect Tk 5872 billion and Tk 7097 billion revenue in FY 2024-25, FY 2025-26
The government of Bangladesh has set ambitious revenue collection targets for the fiscal years 2024-25 and 2025-26, aiming to gather Tk 5872 billion and Tk 7097 billion, respectively. The strategy hinges on enhancing digitalization and simplifying tax procedures for both businesses and individuals.
The focus will be on direct taxes and VAT to raise more revenue. In addition to expanding the tax net and increasing the capacity of tax officials, exercises will be carried out to rationalise the current culture of widespread tax exemptions and to bring in heightened transparency in the budgetary discourse.
As per the Medium Term Macroeconomic Policy Statement (2023-24 to 2025-26) of the Finance Division of Finance Ministry, some Tk 5343 billion will come from the tax revenue sector in 2024-25 fiscal and Tk 6463 billion in 2025-26.
In the next two fiscal years, the National Board of Revenue (NBR) will provide Tk 5095 billion and Tk 6171 billion.
From the Income Tax wing, the projected collection will be Tk 1753 billion for the next fiscal, and Tk 2123 billion for 2025-26 fiscal. Collection from the import duties will be Tk 1511 billion and Tk 1830 billion respectively.
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From VAT and Supplementary Duties, the revenue collection will be Tk 1831 billion and Tk 2218 billion respectively.
The non-NBR tax for 2024-25 and 2025-26 will be Tk 248 billion and Tk 292 billion respectively. Non-tax revenue collection will be Tk 529 billion and Tk 634 billion respectively.
The target for the running 2023-24 fiscal is Tk 5000 billion with Tk 4500 billion from tax revenue. Of the total amount, Tk 4300 billion will come from NBR through Tk 1480 billion from income tax, Tk 1275 billion from import duties, Tk 1545 billion from VAT and Supplementary duties. Some Tk 200 billion will be collected from the non-NBR sector while Tk 500 billion from non-tax revenue sector.
According to the Medium Term Macroeconomic Policy Statement, revenue outturns estimated for 2023-24 and projection for the next two years show high elasticity and buoyancy, implying robustness in revenue mobilisation in the medium term.
It mentions that among the tax and non-tax parts of the revenue, the tax revenue is forecasted to be more buoyant and elastic than the non-tax part.
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The elasticity data shows that the overall revenue is projected to grow 1.65 times higher than the nominal GDP in FY 2025-26.
As per the statement, the revenue elasticity of GDP for the 2023-24 fiscal is 1.28 times higher than the last fiscal while it is projected to be 1.40 times higher in the next 2024-25 fiscal year.
The tax revenue elasticity of GDP will be 1.33 times higher in the current fiscal while it will be 1.50 times higher in the next fiscal and 1.66 times higher in 2025-26 fiscal year.
The non-tax revenue elasticity of GDP for the running fiscal will be 0.92 times higher in the current fiscal, 0.47 times higher in the next fiscal year, and 1.57 times higher in 2025-26 fiscal year.
On the other hand, the buoyancy indicates that, in FY 2025-26 the tax revenue in real terms may grow 98 percent higher than the growth of real GDP.
The Policy Statement mentions that the revenue mobilisation acts as a catalyst to achieve the development outcomes of a country. Bangladesh has envisioned its long-term development trajectory to be a higher middle-income country in 2031 and to be a developed country in 2041.
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In addition to these aspirations, the ‘Perspective Plan of Bangladesh 2021-2041’ has targeted to raise the revenue- GDP ratio to 19.55 percent by 2031 and to reach 24 percent by 2041.
The statement says that the spectacular growth Bangladesh registered in the last decades, however, has not been underpinned by concomitant revenue growth. A large share of the revenue comes from the direct (income tax) and indirect taxes (VAT and customs) collected by the National Board of Revenue (NBR). Non-NBR taxes and Non-Tax Revenue (NTR) consists of smaller parts.
It said that there is a need to identify the reasons for low revenue collection to move onto the essential next step to correct the course. It is important to understand various issues such as the economic structure (large informality and exemptions), structural weaknesses (complicated processes and information asymmetry), and cultural factors (apathy towards paying taxes) that contribute to significant underperformance in revenue collection.
The government, the policy statement said, with the support of private sector operators, is keen to make paying taxes easy, tax rules easy to understand and rationalise tax exemptions.
Success in revenue collection will be strengthened by making the tax administration easy to approach, increasing digitalization to bring in transparency and predictability and bringing in progressivity in taxation where rich people pay a higher part of the taxes, it added.
Revenue collection up by 14.36 percent in July-October, but behind target: NBR