Finance Minister AMA Muhith said the government wants to bring 50% of the population under the tax net to increase revenue.
For this, different tax mechanisms will be introduced, which is also a major goal of the government, he said at the National Board of Revenue’s 36th meeting of consultative committee at a local hotel yesterday.
With these mechanisms, the revenue collection of the government will grow minimum 3% to 4% in the next four years of the government’s tenure, Muhith said while addressing the meeting as chief guest.
The revenue board and Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) jointly organised the meeting, attended by all the leading associations and business representatives.
“The primary goal of the government was to increase the size of the national budget to provide people with services,” he said.
Muhith said currently the revenue collection as percentage of GDP stands nearly at 11%, which is very low comparing to other countries.
It took 27 years to take revenue to 8% of GDP from 5%, and then it took 6 years to reach to 11%.
The percentage will increase by more 3% to 4% in next four years under this government’s tenure, he added.
“In 2009, we expected to bring 50% people under tax net, which is now 22% to 24% in Nepal and 28% to 32% in India. We have to reach such level. We might reach that level if initiatives and efforts are on.”
The minister has asked the businesses to be prepared as the income tax and Value Added Tax (VAT) will be the major source of revenue collection in coming days.
He said the government is planning to change “surcharge on wealth” to “property tax” from next fiscal year.
The NBR withdrew the wealth tax in 1999. Later in FY2011-12, the government imposed a surcharge on wealth worth over Tk2 crore.
According to NBR data, the board has received Tk208 crore in surcharge on wealth in FY2013-14 from 10,152 individuals.
Many countries including Austria, Denmark, Germany, Sweden, Spain, Finland, and Iceland have abolished the wealth tax in recent times.
In regards to tobacco tax, Muhith said there will be no multiple tax structure for tobacco products from next fiscal.
“Earlier, we used to collect tax from tobacco sector by meeting the tobacco businesses and through negotiations with them. Finalisation of tax slab is not our work. The tax structure will be finalised in line with the global practices” he said.
In Bangladesh, the NBR impose the tax on cigarette through different ad valorem taxes based on retail price slabs while the global practice is to introduce a uniform tax structure for all tobacco products.
