Emphasize on direct tax is suggested as a mean of resource mobilization

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20 November 2011. Today in a workshop, speakers termed VAT as a burden for the poor. They suggested the direct tax as a strong and effective mean of resource mobilization. They were speaking at a workshop jointly organized by equityBD, Tax Justice Network, Voice, INCIDIN Bangladesh and Rupantar. The workshop titled ‘ VAT and Pro Poor Resource Mobilization’ was held in the Mukarram Bhaban of Dhaka University as a part of the South Asian Social forum.

The workshop was moderated by Sahid Ullah of Dev. Synerg. Isnt, while Syad Aminul Haque of EquityBD presented the key note paper. Among others the workshop was also presented by Matti Kohenen of Tax Justice network, Lidy Napcil of Jubilee South Asia Pacific Movement on Debt and Development, Shoshanko Bandopadhay of Centre for Budget and Governance Accountability (India), Farukh Tarique and Ehetashem rana of Pakistan labour party, Pradip Kumar Roy of Online Knowledge Society, Hasan Mehedi of Humanity Watch, Moqbul Ahamad of COAST Trust and Siourab Barua of Shongshoptok.

In key note presentation Syad Aminul Haque mentioned that direct tax in revenue mobilization of Bangladesh is 18 % while indirect tax contribution is 82 %, where VAT is a major part. He mentioned that in developing countries even in countries like in India and Srilanka, contribution of direct tax is around 70 %, 33 % and 31 % respectively. He urged that direct tax net should be expanded. At present only around 50 % TIN (tax identification number) holders are regularly paying taxes. He also urged that government should take policy measures to bring the invisible economy in the surface which is around 37 % of GDP.

Matti Kohenen said, International financial institutions always trying to influence developing countries tax policies. The main intention is to ensure interest of rich countries and multinational companies. She said, developing countries can collect more money from reducing or protecting the illicit money laundering or black money than the VAT. She proposed different taxes like Bank Transfer Tax on rich as an alternative to VAT.

Lidi Napcil said, the state’s right to tax goes hand in hand with the state’s obligation to protect and uphold the rights of its citizens. Taxes should promote equity and redistributive justice.

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