Strict monetary policies are necessary to tackle Bangladesh's rising inflation and economic challenges, said Ahsan H Mansur, an eminent economist and executive director of the Policy Research Institute (PRI).
“Bangladesh needs a tight monetary policy stance to control inflation, achieve price stability, and maintain exchange rate stability," he said at a post-budget discussion hosted by the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI).
He urged that interest rates be determined by the market and highlighted the importance of cutting government spending, especially on administrative costs and subsidies, to prevent excessive borrowing from banks.
Dr Mansur's comments come as the country grapples with high inflation, a shortage of dollars affecting imports, and slow export growth.
"Reducing government spending is crucial to avoid squeezing out private sector credit," he further added.
The event, held at the MCCI Gulshan Office, featured Dr Mashiur Rahman, adviser to the Prime Minister on Economic Affairs, as the Chief Guest, with Habibullah N Karim, senior vice-president of MCCI, moderating.
In his opening remarks, MCCI President Kamran T Rahman praised the reduction of corporate tax rates by 2.5% for unlisted and one-person companies and suggested extending this to listed companies.
He, however, criticised the provision to legalise black money at a 15% tax rate, calling it unfair to honest taxpayers.
"Raising tax rates without broadening the tax base will not achieve the desired tax-GDP ratio," he warned.
Another keynote speaker, Adeeb H Khan, FCA, member of the Tariff and Taxation Committee at MCCI, discussed key income tax and VAT provisions from the Finance Bill 2024-2025.
The discussion also covered issues like excess Advance Income Tax (AIT) being charged as final tax, the possibility of separate authorities for tax and VAT, and the need for bank mergers to include experts and follow proper procedures.
Meanwhile, Mashiur Rahman supported the move to liberalise the exchange rate, describing it as a good step to address economic challenges.
He called for increased productivity, product and market diversification, and more government investment to reduce unemployment and remove economic obstacles.
The event concluded with a vote of thanks from Hasan Mahmood, FCA, chairman of the Tariff and Taxation Committee, MCCI.
