Modernising tariffs, expanding tax base, essential Dr Zaidi Sattar
Business Report :
Policy Research Institute of Bangladesh (PRI) Chairman Dr Zaidi Sattar on Monday said modernizing tariffs, expanding the tax base, digitising tax administration and aligning trade policies with global standards are essential for Bangladesh to integrate more deeply with global markets and negotiate future FTAs.
He also expressed the hope that the next elected government would take decisive steps to implement structural reforms as democratic administrations are generally better positioned to carry out major policy changes.
The PRI Chairman was speaking at a programme titled “Macroeconomic Insights: An Economic Reform Agenda for the Elected Government” held at a hotel in the capital this afternoon.
Dr. Zaidi Sattar also called for bold, fundamental economic reforms similar to those undertaken in the early 1990s, saying that the country’s current situation demands urgent structural changes to sustain growth and remain competitive globally.
“Bangladesh is at a …juncture comparable to the reform period of 1990-91, when the country moved towards a more open, market-oriented economy,” he said.
The Policy Research Institute of Bangladesh (PRI) and Department of Foreign Affairs and Trade (DFAT) of the Australian Government jointly organized the event.
The discussion was attended by Finance Adviser Dr Salehuddin Ahmed as the chief guest, along with leading economists, policymakers and representatives from development partners.
Presided over by Chairman of the PRI Dr. Zaidi Sattar, Dr. KAS Murshid, Former Director General of Bangladesh Institute of Development Studies (BIDS), Clinton Pobke, Deputy High Commissioner, High Commission of Australia to Bangladesh, spoke as special guests.
Dr. Ashikur Rahman, Principal Economist, PRI, made the keynote presentation.
Dr. Fahmida Khatun, Executive Director, Centre for Policy Dialogue (CPD), Dr. M. Masrur Reaz, Chairman and CEO, Policy Exchange Bangladesh (PEB), spoke as distinguished panelists.
The closing remarks was made by Dr. Ahmad Ahsan, Director, PRI.
Dr. Zaidi Sattar stressed that the present challenges offer a similar opportunity for political and economic transformation.
According to PRI chairman, recent economic shocks have slowed growth to around 4 percent, but this does not reflect the country’s long-term potential. Without reforms, the economy’s intrinsic growth rate could return to about 5.5 to 6 percent once political stability is restored.
With strong and timely structural reforms, growth could accelerate to 7 to 8 percent, he said.
However, the Zaidi Sattar cautioned that external developments are reshaping the global trade landscape and Bangladesh cannot continue with “business as usual”.
Among recent developments, PRI chairman described the Bangladesh-Japan Economic Partnership Agreement (EPA) as a major milestone.
The agreement, he said, based on asymmetrical reciprocity, offers Bangladesh significantly wider market access with relatively lower commitments in return.
He credited the government’s negotiation efforts, noting that while a full free trade agreement (FTA) would have been more beneficial.
At the same time, Dr Sattar noted that the India-EU free trade agreement could pose a serious challenge to Bangladesh’s exports, particularly garments.
India’s improved market access and production-linked incentives could intensify competition in the European market, where Bangladesh currently enjoys duty-free access and holds a large share.
With Bangladesh set to graduate from least developed country (LDC) status, he stressed the urgency of pursuing an FTA with the European Union within the next two to three years.
The PRI chairman also highlighted the need for deep reforms in the National Board of Revenue (NBR), describing it as a key institution that requires restructuring to support economic transformation.
He welcomed the recent initiative to split the NBR into separate policy and management divisions, though implementation has yet to begin.
The institute chairman identified major weaknesses in the current tax system, including a narrow tax base, excessive reliance on manual administration and slow progress in automation.
He noted that Bangladesh still depends heavily on indirect taxes, with a 70:30 ratio compared to direct taxes, making the system regressive.
He recommended moving towards a 50:50 balance between direct and indirect taxation to ensure fairness and improve revenue mobilisation.
The PRI chairman also underscored the need for addressing the issue of existing limited export diversification.