The International Monetary Fund (IMF) has praised Bangladesh’s measures, taken by the interim authorities, to beat financial challenges as a result of latest turbulence and main floods.
“In response to the challenging circumstances, the authorities’ efforts to initiate adjustments, including continued monetary tightening and rationalizing non-priority capital spending are commendable,” IMF Mission Chief for Bangladesh Chris Papageorgiou informed BSS.
The IMF mission staff led by him visited Dhaka throughout September 24-30 to debate latest developments and the authorities’ reform priorities.
Papageorgiou stated the well timed formation of an interim authorities helped stabilize the political and safety circumstances, alongside a gradual return to normalcy within the economic system.
“Nonetheless, economic activity has slowed markedly, while inflation remains at double-digit levels, owing to the recent turbulence and major floods. The deterioration in the balance of payments, reflecting outflows in trade credit, has put additional pressure on foreign exchange reserves,” he talked about.
However, what the federal government has taken to enhance the financial points is basically praising, he added.
Responding to a query on the previous authorities fiscal goal, Papageorgiou knowledgeable that the authorities’ funds has been perceived as aspirational, with optimistic tax income and impressive capital spending projections.
Historically, the federal government needed to reduce on each recurring bills and main investments given weak income assortment, he added.
He talked about that this was essential to preserve the funds deficit inside their goal.
“In this context and given continuously high inflation and external pressures, we support the interim government’s intention to rationalize capital spending by considering execution capacity and cutting non-priority projects,” he added.
Given the nation’s low tax revenue-to-GDP ratio in comparison with friends, he stated the IMF helps the authorities’ purpose of setting formidable income targets.
However, these targets should be supported by concrete revenue-generating measures, he famous.
Papageorgiou, nonetheless, stated Bangladesh’s tax-to-GDP ratios has seen little enchancment in recent times.
Sustainable income mobilization requires a multi-pronged strategy, comprising each tax coverage and income administration measures, he added.
On the tax coverage entrance, he stated, key areas for reform embody decreasing widespread tax exemptions, simplifying the value-added tax (VAT) system, and broadening the tax base, as a part of an overarching technique of shifting the tax burden from trade-related taxes towards revenue tax and VAT.
To enhance tax administration, he stated precedence reforms embody digitalization of tax assortment processes and higher tax compliance danger administration.
The put up IMF lauds Bangladesh’s efforts to beat financial challenges appeared first on Bd24live | Bangla Online News Portal.