Planning Minister AHM Mustafa Kamal has outlined the revenue collection strategy to meet the budget deficit amid widespread concern over the higher revenue target in the upcoming fiscal year.
“We need to raise revenue collection growth to 30% from 17-18% on an average now in the next fiscal year. It means an additional amount of more than Tk40,000 crore has to be collected,” he said.
Mostafa Kamal was addressing a dialogue on the proposed budget, organised by the Centre for Policy Dialogue (CPD) yesterday.
“Out of the additional target, about Tk11,000 crore will be earned from widening tax net, making reforms to auditing, transfer pricing and Vat system, complete digitisation of revenue collection system and making ADR realistic,” he said.
Some Tk26,000 crore will come from outstanding revenue which was hit by litigation. All the cases related to revenue will be settled by this year, the minister said.
Besides, Tk4,500 crore will come from cigarette firms, Tk1,000 crore from mobile phone operators, Tk1,600 crore from the garment sector and Tk400 crore from the service sector.
In a post-budget press conference, Finance Minister AMA Muhith admitted that the revenue collection target is high and ambitious.
CPD Chairman Prof Rehman Sobhan presided over the dialogue.
He said, over the years the country has done reasonably well in enhancing revenue collection.
“However, if we put ourselves into any international comparative measure on revenue generation, we are still doing very poorly.”
Rehman Sobhan said in terms of revenue to GDP ratio growth compared to most of the countries in the region, certainly way behind countries like Vietnam, Bangladesh is in fact very poor.
“So, whether you miss your target or not is less important. The problem is that overall, there is mountainous declining in terms of revenue generation activity.”
State Minister for Finance and Planning Abdul Mannan thinks the budget is a compromising document for any country as the government has to make the budget under intense pressure from various sectors.
He said prioritisation is completely missing in the budgetary system of Bangladesh.
About economic statistical credibility, Abdul Mannan said no statistics in the world is credible. “We are not doctoring with the statistics. This is not a problem existing only in our country, but around the world.”
Ex-commerce minister and BNP leader Amir Khosru Mahmud Chowdhury blamed the sluggish private investment for not improving the GDP growth rate.
“For the last eight years, the growth rate is sticking to around 6%. It is not increasing since the private investment is poor,” he said.
Amir Khosru said a group of people are looting public money from state-owned banks under political patronisation and getting impunity.
He said: “The banking division is a big source of corruption. The Board of Investment has become an ineffective institution.”
CPD executive director Prof Mustafizur Raman presented the keynote paper on the proposed budget.
He said the new budget has set a target of an additional Tk45,072 crore revenue collection with a 27.6% growth over the outgoing fiscal year.
Under the present circumstances, however, the required growth rate for revenue in the upcoming fiscal year may shoot up to around 36.3%, while for NBR the actual target may stand at around 37%, he said.
“The ambitious target will create a lot of pressure on the government to implement the budget,” the economist said.