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Fiscal Measures in the Bangladesh National Budget of 2009-10:
An Appraisal of Income Tax
-- Mohammad Faridul Alam and Nikhil Chandra Shil
The budget for the fiscal year 2009-10, for the National Parliament of Bangladesh, was
proposed by the Finance Minister, Abul Mal Abdul Muhit, on June 11, 2009. The maiden budget of
the newly elected government in Bangladesh is of the size Tk. 113,819 cr, the largest in history.
It includes a gross revenue of Tk. 84,591 cr and the budget deficiency is Tk. 29,228
cr. This paper highlights the important fiscal measures taken through this budget regarding income tax
and the implications thereof have also been examined. In many cases, tax rates and tax nets
have been enhanced, and at the same time, fiscal incentives to encourage voluntary tax
compliance and tax planning have also been introduced or the time period of existing benefits has
been extended.
© 2011 IUP. All Rights Reserved.
Fragile States! : Why Subnational Governments
in Nigeria Cannot Subsist
on Internally Generated Revenue?
-- Chukwuma Agu
There is serious concern about sustainability of states in Nigeria owing to high dependence
on centrally collected and shared federation account. This is partly because the federation
account is funded mainly from revenue from oil—an exhaustible resource with fluctuating
international price and demand. Interestingly, basic operations in many states in Nigeria cannot go on
without the monthly allocations. This has partly helped government officials to pay little attention
to growing the economic base that would help them to become independent. Many states rely
almost exclusively on this handout from the federation account. Realizing the lack of sustainability
of this situation, this paper sets out to evaluate the state of Internally Generated Revenue (IGR)
in states in Nigeria. The paper is based on a survey of the five states of the South-East region.
It evaluates sources of revenue, methods of revenue collection, remittance of such revenue
to government coffers and points out some of the loopholes and strengths of the system. It
notes that modern technology is yet to be incorporated in IGR planning and collection
approaches, with officials relying mainly on physical visitation, memos and letters to notify tax
payers. Remittances of collected funds are mainly by cash, creating opportunities for
embezzlement. These inefficiencies filter to taxpayers by way of multiple payments of the same tax
and harassments. The paper also examines the issue of untapped sectors, their implications
and options for tapping into them, particularly essential for the government to woo the private
sector, improve its image and trust, and then enter into partnership with the private sector to
grow critical sectors of the economy.
© 2011 IUP. All Rights Reserved.
Direct Tax Reforms in India: A Comparative Study of Pre-and Post-Liberalization Periods
-- Om Parkash and A S Sidhu
In a developing economy like India, tax occupies a strategically important position in the
overall development of the country due to its significant contribution to the national exchequer,
which is ultimately spent on the overall development of different sectors of the economy. The budget
for 1991-92 indicated a major effort toward correcting the fiscal imbalances and increasing the
tax revenue through increase in the direct taxes. The study analyzes the impact of direct tax
reforms on Indian economy in terms of various economic indicators and compares it with the
pre-reform period. The study reveals that tax reforms introduced during the post-liberalization period
could not generate the results as desired. The reduction in direct tax rates could not lead to better
tax compliance in a much desired manner. Tax reforms have increased the number of assessees
but the resultant increase in the tax revenue has not been sufficient. The major share of taxes
comes from low income groups. This ineffectiveness will widen the gap between rich and poor and
will lead to further inequality in the society. The rising arrears of taxes have further put a
question mark on the efficiency and effectiveness of the tax collecting machinery. The widening
fiscal deficit over the period will reduce investments in social sectors, like education and
health. Therefore, there is again a very strong need to review the tax reform policies being followed
in the post-liberalization period.
© 2011 IUP. All Rights Reserved.
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