Anti Poor Tax Policy in Budget 2014-15 denies Redistributive Justice

Equity BD PicDhaka, 22nd June 2014. Today fourteen right based civil society organizations and networks led by EquityBD organized a press conference at the national press club and termed the tax policy in proposed budget 2014-25 as anti poor and against the principles of redistributive justice. They also criticized the government for reimbursing capital of around taka 5 thousand Crore as capital to public banks who are suffering from capital deficits because of corruption mostly done by the different companies and supported by politically appointed directors of those banks.

EquityBD’s Chief Moderator Rezaul Karim Chowdhury moderated the press conference while the position paper was read out by Ahsanul Karim of EquityBD. Other speakers of the press conference were Kamruzaman Kochi of Jatiya Krishok Jote, Subol Sarkar of Bangladesh Bhumihin Somity, Badrul Alam of Bangladesh Krisshok Federation and Mostafa Kamal Akanda of EquityBD. Arpon, Online Knowledge Society, MKS, Udayan Bangladesh, Unnayan Dhara Trust, Kishani Shova, Coastal Development Partnership, Jatiya Sramik Jote, Prantajon, Bangladesh Krishok Federation, Bangladesh Bhumihin Somity, Sangsoptok, Synargi Bangladesh and EquityBD are in the group.

In the position paper on behalf of the group, Ahsanul Karim said that the government has expanded tax and tax net but reduced the subsidies and budgetary allocation in essential service sector like agriculture, health and education. This has done actually to fulfill the conditionality of IMF (International Monetary Fund) to get the ECF (Extended Credit Facility) loan, which is hardly acceptable in view of justice framework. He also expresses doubt on collection of Wealth Tax from rich people, which might enhance the passage of illicit capital transfer from the country again.

The group’s position paper has also criticized the new VAT law to be activated from 2015 for having world’s highest average VAT rate of 15% as proposed and expanded up to the rural area and for bringing 536 products under it in place of previous earlier 23. This is also made to attain the IMF conditionality.

The group mentioned in the press conference that, VAT is always regressive to poor. The government has not enhanced tax free income level and it will put pressure on middle class. The group has also criticized the government as well as the Finance Minister, who announced no measures to reduce corruption in Tax departments and on reducing illicit capital flights and black money. The group mentioned, peace and sense of security is the fundamental to stop capital flight, basically which are the responsibilities of government and political parties.

The moderator of the press conference, Rezaul Karim Chowdhury said that through these tax policies government is deviating from the spirit of war on freedom, in fact, from the redistributive justice i.e. taking money from rich and putting it back for the welfare of poor to minimize the existing inequalities.

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