Finance minister AMA Muhith on Saturday said that there had been capital flight from the country to Dubai of the United Arab Emirates and Malaysia in the absence of private sector investment. He observed that the special incentives given since `70s for legalising undisclosed money were ‘totally useless’. Muhith was speaking at a pre-budget meeting with leaders and members of the Economic Reporters’ Forum at the secretariat in the capital.
He said despite demand from various sectors there would be no more special facility in the new budget for legalising undisclosed money other than the existing facility in the income tax law.
The existing law allows legalisation of undisclosed money by giving certain amount of penalty and disclosing sources of the income.
Muhith said that special facilities were given to the real estate sector in the outgoing fiscal, but dividend was nothing.
ERF leaders and members focused on issues ranging from the private sector investment to the tax net.
They also suggested that the finance minister should not lower the corporate tax and should give additional protection to the local industries.
Muhith said the country was not getting investment from the private sector despite substantial increase in investment in the public sector.
‘Investment has gone to Dubai and Malaysia,’ he said adding that the matters were interlinked.
‘I don’t know why the private sector investment is not increasing when the domestic demand is on the rise,’ Muhith said.
He, however, said that many foreign companies were returning with investments after holding back their plans for political unrest in the last couple of years.
He said the country could have attracted higher investment if it had no scarcity of land.
High bank interest might be another reason for discouraging the private sector, the finance minister said.
He, however, said that no additional protection was required for the local industries as the existing protection was enough.
He observed that the stock market was now stable and it could be a source for fund.
He announced that they would offload shares of the state-owned companies, a process that remained suspended for the last couple of years.
Muhith lamented that public-private-partnership other than in the power sector had not progressed as per expectation.
He said that they were planning to keep the lowest threshold of income tax for ten years.
He projected that the number of taxpayers would be double from the existing 11,00,000 in the current five-year tenure of the government.
In the tenure, Muhith said, priority should be given to human resources.
He said in the previous tenure priority had been given to power and transport.
He said there were a lot of investments in the railway sector in the last five years.
Criticising the monthly payment order system, the finance minister said that the MPO system would be scrapped within the next few fiscal years.
He also slated parliamentary standing committees’ chairmen for opposing his view on the MPO system.
The chairmen opposed the view not for the sake of education, but for their interests, he said.
-With New Age input
