Experts at a seminar in the capital on Sunday called for expanding tax base in the South Asian countries to help mobilise adequate resources for proper achievement of the Sustainable Development Goals (SDGs) in the region.
Enhancing tax base, tax compliance and stopping tax evasion are crucial to meet an ever-increasing social sector expenditure, they said.
Experts expressed their opinion at a seminar titled "Financing Development in South Asia: Avenues and Institutional Arrangements", organised as part of the Ninth South Asia Economic Summit in the capital.
"For greater socio-economic development and achievement of SDGs, it is imperative for the countries of the South Asian region to mobilise more resources for development," said former finance adviser Dr. A B Mirza Azizul Islam, who chaired the session.
"Nevertheless, it must be assured that resources are allocated in diversified areas, and are utilised in an efficient manner," he added.
Experts at the seminar also stressed innovative taxation ideas and plugging loopholes in tax regimes as essential for greater mobilisation of internal resources.
"It is obvious that tax nets need to be broadened to ensure greater mobilisation of resources for development in the region," said former governor of Bangladesh Bank (BB) Dr. Salehuddin Ahmed.
"However, greater mobilisation of internal resources does not mean that external sources of resources, like - overseas development assistance, should be ignored," he added.
Dr. Ahmed also identified issuing bonds as a major source for increasing financing for development initiatives.
The former BB governor also called for limiting tax exemption facilities for the government officials.
"Improving tax base, tax compliance and curbing tax evasion are necessary to meet the ever-increasing demand for financing social sector expenditure," said Priyadarshini Dash, a researcher of Research and Information System for Developing Countries (RIS) of India, in her keynote presentation.
"In this context, we need to strengthen (mobilisation of) fiscal resources at sub-national level and the government level by ensuring fair share in central pool of tax and non-tax revenues and by providing autonomy to raise their own resources."
She also called for investing a portion of surplus foreign exchange reserves for infrastructure development and harmonisation of regulations across the South Asian capital markets.
Mirza Azizul Islam was, however, sceptical about the concept of opening capital accounts following several global economic downturns in the recent decades. "The call for opening capital accounts sounds like a good idea. But it has some implications as visible from the Asian crisis of the late 90s and the financial meltdown of 2007-08."
Dr Islam also called for greater restoration and reinforcement of trust among the South Asian countries.
He emphasised intense networking among the regional institutions to share their success stories that can be replicated in all the South Asian countries. "There are success stories even at the micro level of this region that can be replicated from one country to another. Better networking among the institutions of the region can go a long way in replicating those success stories".
Panelists at the seminar also called for removing the trade barriers and increasing regional trade among the South Asian countries.
"This is really unfortunate that despite several attempts to increase trade within the South Asian region, intra-SAARC trade remains very low, while trade agreements like SAFTA did not see success," said Asif Ibrahim, former president of Dhaka Chamber of Commerce and Industry (DCCI).
"While there have been low-cost solutions for health and education targets under the Millennium Development Goals (MDGs), it is important to ensure quality for achieving SDGs," said Professor Selim Raihan of Dhaka University.
"We have to prioritise and diversify investments in our Special Economic Zones (SEZs)," he said, adding that good business environment also needs to be ensured for attracting investment.
Dr. Sreeradha Dutta of Maulana Abul Kalam Azad Institute of India in her speech called for rejuvenating the border haat system for greater exchange of goods and services across the region.
"The original idea was to develop border haats at community level. Common services like healthcare should also be offered at cross-border level through the border haats," she noted.
"Data is really important. If you invest in data, you can better use resources for achieving SDGs," said Saadiya Razzaq of Sustainable Development Policy Institute of Pakistan.
She called for adopting common strategies for mobilising necessary resources for achieving SDGS. She also identified climate change and water management as areas where regional cooperation is required. Speakers at the seminar also called for better political understanding among the neighbouring countries of the South Asia region and establishment of a South Asian Bank to foster better financial and development cooperation in the region.