The National Board of Revenue has launched groundwork of formulating the FY2016-17 budget which would need to explore new sectors of revenue moblisation to meet increasing demand of financing in the next fiscal year.
In the next year’s budget, the NBR has two core challenges - identifying potential sectors for increasing tax base and implementation of the new value added tax law, officials said.
The revenue authorities recently held its Budget Implementation Forum meeting with NBR Chairman Nojibur Rahman in the chair. The meeting discussed the issues.
Officials said the NBR would try to identify eligible taxpayers through door-to-door surveys and bring them under tax net so the tax-GDP ratio got improved.
It would also focus on some selected upazilas that are economically prospective to bring businesses under NBR’s motivation programme.
The government has a target to raise the number of active taxpayers to 3m by the FY2018-19 as it will complete the current term in office. The government wants to establish tax offices in all upazilas by 2018.
The meeting also discussed about implementation of the new VAT and Supplementary Duty Act 2012, which will come into effect from July 2016.
With the introduction of the law, all levels of business will have to pay a unique and single VAT rate of 15%. It will have no provisions for package VAT or truncated value-based VAT system.
Although the budget preparation usually begins in March, this time the NBR has already begun the process inviting opinions and proposals from its field offices. Officials said this was to ensure the next budget as “participatory and business-friendly as well as revenue-friendly.”
The NBR has sent letters to its all income tax zones, customs houses and to the customs, excise and VAT commissionerates asking them to send proposals and recommendations on laws and budget measures based on their practical experiences.
With an annual budget, the government brings amendments to the existing laws and rules related to customs, VAT and income tax to maximise revenue earnings, provide protection to local industries, facilitate international trade and solve procedural complexities in revenue collection.
After analysing the field level proposals, the NBR will sit with its top officials from the headquarters to discuss the issues. It will also send letters to all the stakeholders including chambers and associations soon to send proposals from their side so that they can be considered while formulating the budget.
After receiving proposals and recommendations, the NBR will hold pre-budget sector-wise discussions with trade bodies and other stakeholders, likely in April.
“The overall size of the budget and the revenue target will be increased next fiscal year. So, the NBR is laying emphasis on finding out new sectors for revenue mobilisation so that it can manage increased revenue for government expenditures,” said a senior official at the NBR.
Usually, the trade bodies and business organisations forward their proposals to the apex trade body, which submits the proposals to the revenue authorities in a compiled form. The organisations having no affiliation with any chamber or association usually submit their proposals to the NBR-appointed chief budget coordinator.