No immediate compliance with IMF demands Says Salehuddin
Staff Reporter :
The fourth and fifth instalments of Bangladesh’s $4.7 billion loan package from the International Monetary Fund (IMF), which have been delayed due to unmet conditions, could be disbursed together in June, according to Finance Adviser Salehuddin Ahmed.
The IMF executive board was originally scheduled to discuss the release of the fourth instalment, amounting to $645 million, on 5 February, but the discussion has been postponed to 12 March.
“We will wait. Possibly, a review of both instalments will be conducted together,” Ahmed told reporters following a session at the District Commissioner (DC) conference in Dhaka on Monday.
He stated that the government will not comply with all of the IMF’s conditions, even if the lender exerts pressure. “We cannot implement multiple changes at once, even if they insist,” he said.
The government has requested that the IMF review the progress of the loan conditions in June, rather than immediately. The loan, which was approved in January 2023 to help Bangladesh address its foreign exchange crisis, comes with several conditions for its disbursement.
The release of the fourth instalment, in particular, depends on the fulfilment of four key requirements.
They are strengthening revenue collection to manage external pressures, tightening monetary policy to curb inflation, allowing the foreign exchange rate to be fully determined by the market and adopting environmentally sustainable policies in response to climate change.
Ahmed noted that Bangladesh’s macroeconomic indicators have improved, citing a positive current account, financial account, and increased expatriate incomes.
To meet the IMF’s revenue collection condition, he emphasised the government’s strategy to broaden the tax base rather than increasing tax rates. The National Board of Revenue (NBR) has been instructed to expand tax collection in rural areas, while keeping VAT and tax rates at reasonable levels.
Deputy Commissioners have been directed to compile lists of businessmen, doctors, lawyers, and other professionals in districts and upazilas who earn taxable incomes but do not currently pay taxes.
Ahmed highlighted that many doctors and lawyers conduct transactions in cash, making it difficult to track their incomes. “For instance, doctors’ consultation fees are often not issued with receipts. If these payments were made digitally, they would be recorded. In foreign countries, everything is documented,” he explained.
Ahmed stated that Deputy Commissioners raised concerns about improving communication networks in remote areas, better transportation facilities for students and challenges faced by SMEs in accessing loans.
“We will address these issues and enhance communication between the government and deputy commissioners,” he added.