“Imposing more taxes on luxury items to save foreign exchange reserves”

Atiur narrates the ICAB webinar

| Updated:
Jun 09, 2022 11:49:43 a.m.

Bangladesh needs to be careful with imports and should impose more taxes on luxury items to save the country’s foreign exchange reserves, former Bangladesh Bank Governor Dr. Atiur Rahman has said.

Speaking as a keynote guest in a webinar on Tuesday evening, Atiur Rahman said the government should impose more taxes on the importation of various luxury items, to discourage importation.

The Institute of Chartered Accountants Bangladesh (ICAB) organized the webinar on “The Political Economy of Currency Devaluation in Developing Countries: Comparative Practices and the History of Bangladesh”.

Dr. Rahman suggested looking at expensive projects in the country to reduce pressure on currencies.

“We need to reduce the number of luxury projects that do not generate jobs and direct investment,” he said.

“If we focus on local production of items that are used for export products like ready-to-wear garments, we can save $10 billion to $15 billion a year,” Mr. Rahman.

By improving the service industry, thousands of dollars could be saved, which is needed for shipment payments from Bangladesh, he said.

The country needs an integrated system of financial transactions to ensure the continued development of the economy as devolved neighborhoods take advantage of organizations due to a loophole in the system, said Dr. Khondaker Golam Moazzem, Director of research from the Center for Policy Dialogue (CPD), while speaking. as a special guest.

“There are a lot of anomalies and shortcomings where the advantages of organizations are taken by acquired neighborhoods,” he said.

He said, however, that some of the country’s financial systems are integrated, as the ICAB and the National Board of Revenue (NBR) have partnered to help cross-check financial reporting.

“This is a very positive initiative and it will help to reduce the number of fake financial statements and ultimately bring more financial transparency in the financial system,” Dr. Moazzem added.

He stressed the need for further integration between the BNR and commercial banks as well as currency traders, in order to reduce financial corruption.

ICAB Chairman Md Shahadat Hossain said in his welcome speech that the country’s currency market had become jittery and the central bank had been forced to devalue the taka several times after a sharp depreciation in January.

The latest forex crisis will put further pressure on the country’s foreign exchange reserves, he said, adding that it will impact the country’s economy and the prices of raw materials, including food.

Economies around the world have been hurt by the pandemic and the sharp rise in fuel prices, Hossain said.

As a result, at home even utilities become more expensive, he noted.

In the wake of the pandemic, currency depreciation has wreaked havoc on some key commodities in many countries around the world, including Bangladesh, he added.

Dr. Jamaluddin Ahmed, former Chairman of ICAB and Chairman of Emerging Credit Rating Ltd, gave a keynote presentation during the virtual seminar.

Highlighting the main features of his paper, Dr. Ahmed said that currency appreciation and depreciation affect all international transactions of a country as it affects international relative prices.

Currency devaluation leaves multiple effects on the economic, social and political life of a country, he said.

Currency devaluation emerges as a political tool technique that policy makers apply in economic management, he added.

If policymakers fail to navigate effective currency valuation mechanisms, Dr. Ahmed said, the economy will suffer, leading to declining economic growth in the country, as well as social and social instability. Politics.

Manzur Ahmed, Advisor of Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and Dr M Abu Eusuf, Executive Director of Research and Policy Integration for Development (RAPID) Bangladesh, were present at the seminar as speakers.

Adeeb Hossain Khan, Board Member and Former President of ICAB and Senior Partner of Rahman Rahman Huq, moderated the session.

[email protected]

Comments are closed.