AMA Muhith, Bangladesh Finance Minister, placed a Tk 250,506crore budget for fiscal year 2014-15 in parliament (known as Jatiya Sangsad) on Thursday.

The budget expects a GDP growth of 7.3 per cent, which is higher than the revised estimate of 6.5 per cent for the outgoing fiscal. However, the Bangladesh Bureau of Statistics (BBS) cited the current GDP growth to be 6.12 per cent.

The new budget for set an overall revenue earning target of Tk 182,954crore keeping an overall budget deficit of around Tk 67,552crore of which Tk 18,069crore will come from the foreign sources while Tk 43,277crore from local sources, including bank borrowings.

Of the overall revenue earning target, the share of the National Board of Revenue (NBR) will be around Tk 149,720crore, non-NBR revenue Tk 5,572crore, non-tax revenue (various tolls and services fee) Tk 27,662crore and foreign grants Tk 6,206crore.

In the new budget, the finance minister has proposed doubling the tax rate on high earners. As per the proposal, the tax rate would go up for those with annual income over Tk 4.42 million from the existing 15 per cent to 30 per cent. This new tax rate was being imposed “with a view to ensuring equitable distribution of resources and to reducing economic disparity”.

Muhith’s new top tax rate is similar to the Buffett Rule introduced by US President Barack Obama in 2011, in which income over $ 1 million is taxed at a minimum 30 per cent rate. The Buffett Rule is inspired by billionaire Warren Buffett, who has long voiced support for increased income taxes on the wealthy.

A leading business tycoon, wishing not to be named, opined that the newly proposed budget is a day-dream and was sketched somehow only to be placed in the parliament. It is, in no way, representing the thoughts and farsightedness of an economist of global repute like AMA Muhith. –Special Correspondent