Indirect taxes not fair to the poor: Speakers

The wealth disparity between the rich and the poor is increasing day by day amid various government initiatives to support the indigents, said speakers at a discussion, on Monday.

They said not only the poor, but also the middle class are being affected due to the high inflation. No matter how low the indirect tax is, it means a lot to the poor.

The speakers observed these on the occasion of completion of  ‘Start-up Event’ with support of WAVE Foundation at Dhaka’s Economic Reporters Forum (ERF).

Start-up Event president and executive director of WAVE Foundation Mohsin Ali said poor people have to buy not only food but also their other daily necessities for living. It must be stressful for them.

“If the disparity between the rich and the poor is not lessened, the successes achieved by the government over implementing the SDGs may be affected,” he said.

Mohsin said the rich evade taxes and commit corruption. The government’s initiative to hold them accountable should be accelerated. “Through this project, a conscious demand for the establishment of a progressive tax system is being raised on behalf of the people.”

He said Bangladesh’s current taxation system is mostly dependent on indirect taxes, which appear to be unfair to the poor and low-income groups. Indirect taxation takes away a larger portion of their income than it does to the wealthier.

On the other hand, since the effectiveness of VAT affects everyone equally, it creates a burden on the poor and ultimately creates income inequality between the rich and the poor.

He added that the poor have to spend more of their income on essential goods compared to the rich people. In such a situation, a progressive tax system with people’s participation is necessary.

Executive Director of Wave Foundation Mohsin Ali presided over the event. Deputy Secretary of the Finance Division Tajul Islam was present as guest of honour.

The discussion was moderated by Kaniz Fatema, Deputy Director of the Wave Foundation, while project coordinator Nirmal Das presented the keynote paper.

Research Associate and Daffodil Institute of IT Lecturer Sanjida Islam presented a summary of the research on ‘Tax Fairness through Progressive Tax Management in the Context of Bangladesh’. 

Md Tajul Islam said no VAT on rice and raw vegetables should be realised. The government is increasing the scope of the social security programme every year as they are working for the welfare of all, he added.