The government has incurred a huge amount of revenue loss due to tax exemption opportunities for the businessmen close to ousted Prime Minister Sheikh Hasina.
During the 16-year rule of fascist Sheikh Hasina, the National Board of Revenue (NBR) granted tax exemptions to those businessmen and their groups by issuing special circulars or SROs.
The awful scenarios of revenue loss was dug out by the Committee assigned to prepare “White Paper on the State of Bangladesh Economy” through getting to bottom of irregularities and corruption during the regime of the Awami League-led government.
The government formed the committee led by Dr Debapriya Bhattacharya, distinguished fellow at Centre for Policy Dialogue (CPD), an independent think-tank.
The committee submitted its report to Chief Advisor Professor Muhammad Yunus on December 1. The then Prime Minister Sheikh Hasina was ousted in the mass uprising of student and people on August 5 last.
Immediately after assuming the office on August 8, Chief Advisor Professor Muhammad Yunus announced the formation of the committee, which submitted its report within 90 days.
Mohammad Abu Yusuf, Professor of Dhaka University and a member of the White Paper Preparation Committee, told BSS that the tax exemption amount was 6 percent of the country’s total GDP during the previous regime. If it had been reduced by half, the education budget could have been doubled and the health budget could have been tripled, he added.
The White Paper mentioned that since 2009, the NBR had to issue SROs on the directive of the Ministry of Finance at various times during the Awami League government, through which in most cases, businessmen close to the government got the opportunity of tax exemption.
These privileged businessmen were either associated with the ruling political party or close to high-level bureaucrats.
It further stated that excessive use of SRO (tax exemption facility) during Sheikh Hasina’s tenure had become a tool for political gain, which weakened the effectiveness of Bangladesh’s tax regime.
Tax exemption facility through SRO has weakened the country’s tax base and encouraged corruption, noted the White Paper.
It added, ad hoc based changes in tax laws through SRO were often contrary to transparency and predictability, which disrupted the normal flow of business and reduced revenue collection.
It continued that several business groups like BEXIMCO, S Alam Group and Summit Group have regularly availed this facility.
According to the While Paper, Summit Group received full tax exemption on project income, income of foreigners, royalty, technical know-how fees and technical assistance fees, capital gains from share transfer and interest on foreign loans, subject to maintaining accounts and filing income tax returns for their LNG terminal operations in 2018.
The group also received full tax exemption on income of foreigners, interest on foreign loans, royalty, technical know-how and assistance fees and capital gains from share transfer within three years of its arrival in Bangladesh for 15 more power projects.
Similarly, other companies have also enjoyed tax exemption benefits in various forms.
However, the specific amount of this tax exemption benefit was not mentioned in the white paper report.
The Chief Advisor, after receiving the white paper report on December 1, mentioned that this is a historical document. He also talked about inclusion of the White Paper report in the curriculum.
In his Victory Day speech on December 16, Professor Yunus also said, “The people of the country were shocked after reading the White Paper report. Everyone understood that the fascist government had destroyed the country’s economy. But they could not imagine the extent of the devastation it had caused to the economy. The White Paper preparation committee has figured out the amount after calculation.”
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