Muhith loves it big

As he presents his sixth budget in a row, Finance Minister AMA Muhith is looking to boost government revenues by introducing a 15 percent across-the-board VAT covering all sectors of the economy.

This will be the first budget of the Awami League-led government after it returned to power in January this year -- a budget in which Muhith has not succumbed to pressures to provide for 'whitening black money’.

"That does not help the economy at all, so I will resist all pressures to allow whitening black money," Muhith had told bdnews24.com in a pre-budget exclusive interview last week.

Muhith will place a Tk 2.5 trillion budget for 2014-15 fiscal year (FY) in Parliament at 3pm Thursday.

The first budget of the independent Bangladesh was for only Tk 7.86 billion -- Muhith says with rapid economic growth, the size of the budget is 'expected to be big’.

This year, the budget will be presented in digital format.

The new budget will not have any provisions 'for whitening black money' except by payment of penalty on undisclosed income at existing rates.

“We have to provide the opportunity in line with the law, nothing beyond that,” Muhith said.

The current budget (2013-14 FY) allowed for whitening black money when it provided for waivers on purchase of apartment, house and land.

The minister made it clear that he would not allow it this time.

On introducing 15 percent VAT, Muhith said, “We have been talking about introducing this system for long. But we could not do it as businesspeople wanted time.

“There will be a guideline on this issue in this budget. We want to start 15 percent VAT in all sectors by 2015."

File Photo

Muhith is expected to arrive in Parliament shortly before 3pm accompanied by Prime Minister Sheikh Hasina with his customary black briefcase containing the budget.

Budget was placed without the opposition in Parliament during the last several years.

This time the Jatiya Party is the main opposition party, but it is also in government as well.

However, the absence of a major party in Opposition will be conspicuous.

The first Finance Minister Tajuddin Ahmed presented the country's first budget for last six months of 1971-72 FY and 1972-73 FY on June 30, 1972.

It was covered live on TV and radio.

Ahmed presented the first budget of the independent Bangladesh covering two fiscal years.

In 1972-73 FY, revenue income was set at Tk 2.85 billion and expenditure was fixed at Tk 2.18 billion. The surplus of revenue sector was Tk 660.95 million.

Later there were very few surplus budgets; deficit budget became the usual practice.

In the first budget annual development programme (ADP) was set at Tk 3.18 billion and Tk 1.83 billion was fixed at for rehabilitation purpose.

In the next budget the ADP is fixed at Tk 803.15 billion.

The budget for 1981-82 FY was 46.77 billion placed by former Finance Minister Saifur Rahman.

A decade later, Maj Gen (Retd) Mohammad Abdul Munem presented a Tk 129.6 billion for 1990-91 FY.

In 2002-03 FY the budget was Tk 420.75 billion.

The size of the budget has increased several times to Tk 1.61 trillion in 2011-12 FY.

The first budget of the Awami League government’s past tenure was Tk 1.10 trillion.

On the rise in budget size in every year, Finance Minister Muhith said, “The size of budget has increased in keeping with the growing size of our economy.

“We have to keep the continuity and match the fast growth of our economy in the last five years. The people also expect the same.”

"If we want to do that the size of the budget will grow. But it is not that only our expenditure has increased, our income has also gone up as well," Muhith said.

“In 2009-10 FY we set revenue target at Tk 610 billion obtained by the National Board of Revenue. In the new budget we have increased it to about Tk 1.5 trillion, 2.5 times,” he said.