Central bank’s independence, reforms to tax laws urged

Bangladesh Bank logo. Wikimedia Commons

Dhaka, Sept 30 — Economists and business leaders at a policy dialogue on Monday stressed the urgent need for tax reforms, central bank independence, and institutional strengthening to ensure Bangladesh’s economic stability and sustainable growth.

The discussion was held at the Policy Research Institute (PRI) conference room as part of the July-August edition of its Monthly Macroeconomic Insights (MMI), hosted by PRI’s Centre for Macroeconomic Analysis (CMEA) in partnership with the Australian Government’s Department of Foreign Affairs and Trade (DFAT).

Chaired by PRI Executive Director Dr Khurshid Alam, the session highlighted the difficult trade-offs facing the economy.

“Growth is being held back by constraints on imports of capital machinery and essential inputs. The real question is whether we should pursue sustainable growth supported by stability and sound macroeconomic conditions, which will require deeper reforms,” Dr Alam said.

Former Bangladesh Bank governor and Chairperson of East West University’s Board of Trustees, Dr Mohammed Farashuddin, attended as Chief Guest. Stressing tax reform, he said, “Every year, 20 lakh new taxpayers must be added so the burden does not fall disproportionately on existing taxpayers.

At the same time, the government must take stronger action against money launderers.” He also called for stronger support for small entrepreneurs through skills training and low-interest loans to generate employment.

Delivering the keynote, Dr Ashikur Rahman, Principal Economist at PRI, warned that past erosion of Bangladesh Bank’s independence had created conditions for financial irregularities that undermined the banking system.

“Central bank independence is no longer a desirable policy choice; it is a fundamental necessity for Bangladesh’s economic future,” he said, urging reforms that would give Bangladesh Bank autonomy comparable to the Bank of England or the US Federal Reserve.

Metropolitan Chamber of Commerce and Industry (MCCI) President Kamran T. Rahman said expanding employment and skills development is crucial to harness the country’s demographic dividend.

Deputy Head of Mission at the Australian High Commission Clinton Pobke stressed that rare reform windows must not be lost and reaffirmed Australia’s commitment to support Bangladesh’s reform agenda through deeper trade, investment, and development cooperation. - UNB