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Econmaster godmode

  1. 1. THE CASE
  2. 2. Situation Analysis Service Sector Output Growth 6% Job Growth 4% Real GDP 6.6% New Job Growth 0.9% Agriculture Output Growth 3.2% Job Growth -1.1% Manufacturing Output Growth 10.4% Job Growth -1.6% Male: Grew 0.17 Million Female: Grew 0.92 Million Female Informal Sector Increased by 1.9 Million Formal Sector Decreased by 0.1 Million Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  3. 3. Youth Scenario Rise of NEET in Youth Population (age 15 to 29) 2013: 25.4% 2016-17: 29.8% One-third of the population is youth Youth Unemployment Rate 8.1% National Unemployment Rate 10.6% Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  4. 4. Situation Analysis Bangladesh Bureau of Statistics found that the income share of the richest 5% of the country rose by 57% in 10 years, while the poorest 5% had their income reduced by 59% in the same period Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  5. 5. Economic Facts The Most Commonly Shared Development Objectives Growth Inequality Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  6. 6. Economic Facts Growth, Inequality and Poverty Alleviations are Inter-related Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  7. 7. Gini Coefficients and Growth Rates Name of the Country Year Gini Coefficient Year Gini Coefficient 1990 – 2000 2000 – 2010 Bangladesh 1992 28.3 2010 32.1 4.8 5.9 China 1995 41.5 2009 42.1 10.6 10.8 India 1994 29.7 2010 33.9 5.9 8.0 Indonesia 1995 34.2 2010 35.6 4.2 5.3 Malaysia 1989 48.4 2009 46.2 7.0 5.0 Pakistan 1991 31.2 2005 31.2 3.8 5.1 Philippines 1994 42.9 2010 43.0 3.3 4.9 Sri Lanka 1990 30.1 2010 36.4 5.3 5.6 Thailand 1992 46.2 2010 39.4 4.2 4.5 Vietnam 1993 35.7 2006 37.8 7.9 7.5 Source: The World Bank, World Development Report and World Development Indicators, Various Issues Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  8. 8. Growth Effect Poor gets benefitted from the “trickle down” effects of growth Public services and lifestyle gets improved Employment in the growth sector Growth boosts Government income Rise of labor income Eventually pushes the sectors that were lagging behind Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  9. 9. Jobless Growth Why? 4 Major Reasons Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  10. 10. Automation in Manufacturing1
  11. 11. Increasing Informal Jobs2
  12. 12. Private Sector is Not Diversified3
  13. 13. Theoretical Education Structure4
  14. 14. Jobless Growth - Reasons Theoretical Education Structure Increasing Informal Jobs Automation in Manufacturing Private Sector is Not Diversified Core Issues Lack of skilled workers + Lack of investments in diverse sectors Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  15. 15. Recommendations Strategies Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  16. 16. Recommendations Location Based Skill Learning Centers Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  17. 17. Geographical Inequity Unemployment Rate varies from one region to another Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  18. 18. The Level of Inequality Rangpur’s unemployment rate is 7.28% Dhaka’s unemployment rate is 4.81% Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  19. 19. Recommendations Using the Strengths of Different Regions Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  20. 20. Unique Strengths Dhaka Administrations and Management Chittagong Ports and Docks Growing Tourism Industry Sylhet Tea Gardens and Tourism Export Processing Zone Rajshahi Cheap Labor Force Rail and Road Infrastructure Khulna Tourism and Jute Industry Ship Building Yard Barisal Rice, Pulses and Hide Industry Bakery and Pharmaceuticals Rangpur Rice, Pulses and Hide Industry Bakery and Pharmaceuticals Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  21. 21. Recommendations Promoting Polytechnic Institutes Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  22. 22. Why people are not getting jobs? 33.3 22.2 29.6 14.8 0 5 10 15 20 25 30 35 Impractical Education System Improper Skillsets Not enough investment in diverse sector Automation Primary Research Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  23. 23. Lack of Skilled Workers Why? Serious Skill Gap in Education System 6.6 million qualified people are deprived of jobs Hardly Any Communicating Between the Universities and Industries Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  24. 24. Lack of Skilled Workers But Plenty of Opportunities in the technical and vocational sectors Not Adequate Graduates in this current education system Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  25. 25. Social and Cultural Stigma For Dropouts Not for Students of Merit Low Social Status Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  26. 26. The Reality + Most Polytechnic graduates get jobs within one or two years of their graduation Many of the polytechnic graduates are also entrepreneurs Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  27. 27. Campaign for Perception Change Aims at changing the perception regarding polytechnic institutes and vocational studies Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  28. 28. Successful Cases 12,300 Vocational Colleges 2.7 Crore Students In 2014, China decided to transform 600 of its public universities into polytechnic institutions China’s Amazing Success World’s Largest Vocational Education System Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  29. 29. Recommendations Attract Foreign Investors (FDI) Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  30. 30. Progress So Far 1.83 2 2.45 2.58 2015 2016 2017 2018 Net FDI Inflow in billions of $ FDI is picking up, But slowly Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  31. 31. Ease of Doing Business Index Unavailability of Supply Bangladesh is ranked 176th out of 190 countries Corruption Infrastructure Deficits Political uncertainty Security Concerns Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  32. 32. Countries with Most FDI Inflows 50 58 60 60 66 68 85 144 311 0 50 100 150 200 250 300 350 France Singapore Brazil Australia Ireland Netherlands Hong Kong China United States $, Billions Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  33. 33. Recommendations Creating Entrepreneurs Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  34. 34. Entrepreneurship The foundation on which our country can diversify its products Create More Jobs Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  35. 35. Start Ups of Bangladesh Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  36. 36. Entrepreneurship & Gender Among the total students in university level 30.03% are females The question is what are they doing after graduating? Unemployment among the female graduates is very high which is about 2.5 times higher than that of the male graduates Among the employed population of 5.95 Crore 0.7% Females are managers 5.6% are professionals (QLFS) 2015-16 LFS-Quarterly Labor Force Survey-2015-16 Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  37. 37. Entrepreneurship & Gender Women Imbalance in Jobs/Start Ups Man Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  38. 38. The Obstacles Lack of safety and security Location problem Social and family barriers Balancing between family and career Sexual Harassment/ Unfriendly Work Environment Lack of education and training Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  39. 39. Compared to male, very few females are in managerial position. Why? 14.8 37 14.8 22.2 11 0 5 10 15 20 25 30 35 40 Sexual Harassment Safety Issues Lack of Skills Social Barriers Others Primary Research Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  40. 40. Do you think women get less opportunities to make themselves competitive in the job market? 14.8 40.7 18.5 22.2 3.7 0 5 10 15 20 25 30 35 40 45 Strongly Agree Agree Neutral Disagree Strongly Disagree Primary Research Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  41. 41. Ways to Move Forward Entrepreneurship Development Training Govt. and NGO partnerships to create awareness Ease of access to Data Ease of access to Loans Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  42. 42. Entrepreneurship & Gender Women Balance in Jobs/Start Ups Man Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  43. 43. Task
  44. 44. Tax to GDP Ratio Tax Revenue as Share of GDP (%) Possible with Current Trend of 11.6% 8.5 8.7 9.1 11.6 12.2 0 2 4 6 8 10 12 14 2015 2016 2017 2018 2019 Current Tax-to-GDP 9.1% Target by 2021 16.1% Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  45. 45. Tax to GDP Ratio Possible with Current Trend of 11.6% The Global Financial Integrity (GFI) has recently listed Bangladesh among the top 30 developing countries in terms of illicit financial outflow Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  46. 46. Estimated Tax Gaps in Asia Pacific Economies 7.5 6.7 6.2 5.8 4.7 3 2.1 1.8 1.8 1.5 1.3 Bangladesh Bhutan Afganistan Maldives Indonesia Cambodia Azerbaijan Pakistan China Philippines Malaysia Tax Gap in % Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  47. 47. Tax to GDP Ratio In 2015 alone, nearly USD 6 billion went out of the country, mainly through misinvoicing – an illicit practice adopted by some Bangladeshi exporters According to economist Debapriya Bhattacharya, Bangladeshis laundered money three times the amount of foreign aid it received in 2015 From 2005 to 2014, illicit flow from Bangladesh stood at USD 61.63 billion, which was more than Bangladesh’s 2018 budget, the largest in history Many did not feel it safe to keep their money in the country due to the turbulent nature of politics 1 2 3 4Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  48. 48. Current Scenario Concentrated on limited sectors Highly reliant on VAT and individual taxes Lack of admin capacity and weakness to widen the tax net According to CPD Researcher Director Khondokar Golam Moazzem Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  49. 49. Possible Causes No record of individuals’ income High reliability on VAT and individual taxes Lack of admin capacity Negative perception about tax Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  50. 50. Policy Theme Use a NID Account to track and gather income data Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  51. 51. Implementation Use a NID Account to track and gather income data Mandatory update of bank data with the tied-in NID account Mandatory update of wealth holding and adjustment data with the NID account Update of asset purchase data that has value greater than 5,00,000 BDT 1.1 1.2 1.3 Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  52. 52. Developed Database A developed Database is a must for proper policy implementation Needs to enlist people in and out of tax net Data has to be properly analyzed for the policy to be implemented Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  53. 53. Online Payment The Tax payment should be designed to be carried out online Ease of payment for the people Removes the middle- man from the process Enables the data to come clean without any manipulation Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  54. 54. Primary Research Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action What are the reasons of not giving tax? 29.6 25.9 29.6 14.8 0 5 10 15 20 25 30 35 Strong lobbying by influencing businessmen Perception that Tax is engulfed by corruption No records for individual income Not having proper policy and law
  55. 55. Campaign for Perception Change Social Awareness Campaign regarding the necessity of tax payment Continuous and Rigorous process TVC, RDC, Print Ads, Posters, Banners, Seminars, Group Gatherings, Concerts The adoption process should be started and internalized from an early age (schools) Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  56. 56. Data Analytics and Strategic Alliances Government partnering up with NGOs and private organizations for data and research and to carry out operations Proper data and research is a must for planning actions Data analytics and predictive models are the future Can partner up with Light Castle, Intelligent Machines Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  57. 57. The Bottom-Up Approach Incorporates the Tools Aims for Synergy Large Overall Impact Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  58. 58. Feasibility Low Investment Items Effective and Efficient High Payoff Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  59. 59. Overall Effect Rising Tax-GDP Ratio all over Bangladesh Situation Analysis Reasons Recommendations Tax Situation Policy Recommendation Plan of Action
  60. 60. THANK YOU

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