WB favours launching carbon tax in Bangladesh

A World Bank mission scheduled to take place from July 31 to August 11 may suggest the government to introduce carbon taxes in the country to reduce environmental pollution due to carbon emissions, officials said.
The mission on the Public Expenditure and Revenue Analysis (PERA) and National Strategy for Development of Statistics (NSDS) will discuss with different government agencies on several issues related to boosting revenue performance, strengthening revenue forecasting, introducing carbon tax and implementing the NSDS, they said.
Earlier on March 17, the WB country director for Bangladesh Qimiao Fan had written a letter to finance minister Abul Maal Abdul Muhith suggesting the government for imposing carbon tax, saying that the tax will be a ‘fiscally prudent measure’.
A carbon tax is a tax levied on carbon content of fuels that release carbon dioxide when they are burnt. In many countries carbon tax is imposed on vehicles based on the use of their fuel efficiency.
According to the multilateral lending agency, a carbon tax directly sets a price on carbon by defining a tax rate on greenhouse gas emissions or – more commonly – on the carbon content of fossil fuels.
The mission will discuss analytical work and technical assistance that can be carried out under PERA programme and to advance preparation of an investment project on implementation of the NSDS, a WB letter to the Economic Relations Division of the finance ministry stated.
‘The main objectives of the mission are to understand better the needs of the NBR to boost revenue performance and strengthen revenue forecasting, share and receive feedback on a preliminary revenue forecasting tool for carbon taxes,’ the letter said.
The other objectives are to agree support for improving debt management and inform authorities of the outcome of a concept note review for a project to support the government to implement the NSDS, it said.
The WB mission headed by Shubham Chaudhuri, practice manager of macroeconomic and fiscal management for South Asia, will meet officials of the finance ministry, National Board of Revenue, ERD and Bangladesh Bureau of Statistics.
The mission will comprise of officials from the WB South Asia and Dhaka offices.
Officials of the revenue board said that the high-ups of the NBR had already sought opinion from its three wings—income tax, value-added tax and customs—on the issues.
They said that this will be first time the World Bank team would discuss with the tax authorities about the carbon tax.
The tax authorities will examine the proposals after the WB places details on the matter, they said.

News Courtesy: www.newagebd.net