Efficiency is the real challenge, not funds, says former NBR chief Abdul Majid

Timely completion and efficient handling of projects holds the key to achieving the targets set for the jumbo Tk 3.41 trillion budget for 2016-17, says a former chief of National Board of Revenue (NBR).

NBR's former chairman Abdul Majid told the International Business Forum of Bangladesh (IBFB) on Wednesday that funds are no longer a problem, though achieving the huge revenue target is a challenge.

"There was a time when the country was short of funds. We could not implement ADB schemes because of paucity of funds but that has completely changed," Majid said.

He said it was a bit of the 'chicken or egg problem'.

"If we could implement an ABD project, that would boost the economy, it would create jobs and our revenues would increase."

Majid said the most important need for an economy was investment.

"More investment will infuse dynamism in the economy. Tk 10 is Tk 10 in one hand but once it circulates in five hands, it becomes Tk 50. That means more VAT, more income tax for revenue collectors."

Majid said efficiency in executing projects rather than availability of funds was the key issue in boosting an economy and in achieving budgetary objectives .

"Look at the multi-laning of the Dhaka-Chittagong highway. When this project was approved 7-8 years ago, the hurdles in implementing the project were not anticipated, issues like land acquisition were not taken into account. That caused huge delays and time and cost overruns," he said.

"That is where efficiency in executing projects becomes so important."

 Majid said budgetary allocations for three highways are now been guzzled to build one highway.

"That needs to be minimised . Timely implementation of projects is crucial."

Majid said revenue collection depends on the performance of the economy.

"If incomes increase, income tax will increase; if people buy and sell more, VAT collections will go up; if people export and import more, we will get more duty."

Majid said if the economy is not dynamic, revenues will stagnate or drop.

About the NBR's tax collection efforts, Majid again stressed on professional efficiency.

"The NBR must know its tax base and income patterns and then work out collection plans and vigilance to check evaders. They must always focus on wilful evaders who can pay but avoid doing so, but they must be lenient on those who have not defaulted willingly but have been compelled by business downturns," said Majid.

'Increase spending on development'

The IBFB emphasized on an increase in spending on development projects to boost the economy.

IBFB chairperson Hafizur Rahman Khan said it was unfortunate that 67.5 percent of the budget allocation was to meet expenditures on loan servicing and salaries which did not contribute to development and growth.

"At least 45 percent of the budget allocations should be earmarked for development projects. Only then can we expect an impressive GDP growth." he said.

"If we cannot shift the emphasis on more allocations for development and less for non-development heads, we cannot fulfill the objective of turning Bangladesh into a middle income country by 2021 and a developed country by 2041."