The Transparency International Bangladesh has called for reconsidering the proposed budget, saying it has slyly passed on the tax burden to lower income groups and the general people in its bid to reach the revenue generation goal.

If the proposals are approved, it will expand socio-economic inequality and stoke instability, said the local chapter of the Berlin-based global anti-corruption movement in a statement on Sunday.

The proposed budget has imposed various direct and indirect taxes on low-income groups, small savers, investors and pensioners, said Iftekharuzzaman, executive director of the TIB.

The budget has inequitably proposed to deepen the tax burden on service holders who pay tax regularly and the common people who contribute to most of the VAT income.

Savings certificates are a major credible investment tool for the lower income groups, but the imposition of additional tax on it will prevent them from having an extra income, the TIB said.

Besides, the tax rebate scope, along with the increase in direct and indirect taxes, has been cut drastically for the low-income groups compared to the rich and the wealthy. 

“In one way, this is discriminatory and on the other way, it can't be a sustainable way of raising revenue,” Iftekharuzzaman said.

The government needs to move away from this type of inconsiderate and imprudent path and present a people-friendly revenue policy and implement it.

The revenue burden should be determined on income and assets, not just on easy availability of tax realisation, he added.

The proposed package VAT would put pressure on retailers who will ultimately pass on the increased cost to general customers, the TIB said.

It also said income tax should be the major source of revenue for the government. “The revenue authority is increasingly becoming reliant on VAT after failing to generate the desired level of income tax.”

The TIB also protested the continuation of the “unconstitutional, immoral and discriminatory” provision that offers opportunities to legalise undisclosed money. It hopes the government would discontinue the scope.