The government expects internal sources of revenue will be the primary source to ensure continued economic growth amid the pandemic
The government has taken several measures to provide seamless services to taxpayers through automation and digitalization of Income Tax, VAT, and Customs Departments under the National Board of Revenue (NBR), according to an official document.
The government believes that internal sources will be the main field of revenue collection for uninterrupted economic progress amid the global economic stagnation due to the Covid-19 pandemic and its aftermath.
According to the document, E-payment services have been initiated through the establishment of necessary interfaces with the Bangladesh Bank for online payment of taxes.
Now, taxpayers can pay their returns from home at their convenience through their own bank accounts without physical presence at the premises of Bangladesh Bank or the state-run Sonali Bank.
As in every year, the major portion of the total budget expenditure will be derived from internal resources collected by NBR.
The target revenue collection for the running fiscal has been set at Tk330,078 crore.
VAT wing will contribute the lion share with Tk127,745 crore and the target for Income Tax and Tax on Profit has been set at Tk104, 952 crore.
The revenue collection from import duty will be Tk 37,907 crore, Tk 54,465 crore from supplementary duty, Tk56 crore from export duty, Tk3825 crore from excise duty and Tk1050 crore from other taxes and other duties.
The target of internal revenue is set based on the budget size. There are mainly two sources of revenue, which are-- NBR revenue and non-NBR revenue.
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Almost 85% of the total revenues are collected by the NBR. The main purpose of the NBR is to collect revenue, various types of tax exemption, reduction in rate or tax benefits which are given with respect to income tax, VAT and customs duty for the sake of industrialization, employment generation, an increase in business scope, the protection of domestic industries, the attraction of foreign investment and establishment of equity in society.
The document stated that, in spite of the fact that the tax-GDP ratio is comparatively low, revenue income has sustained growth every year.
However, it said that the apprehension remains that the economy will not return to normalcy in the coming financial year.
The government has formulated its fiscal policy taking the Covid-19 pandemic, the recession, and the instability of international trade and commerce into consideration.
“In consideration of the impact of Covid-19 pandemic in business, in this budget, the government put emphasis on the protection of public health, employment creation and speeding up the pace of our economy along with revenue collection.”
Terming internal sources will be the main field of revenue collection for uninterrupted economic progress amid the global economic stagnation.
The document mentioned, keeping the prevailing circumstances in mind, that the government wants to bring the taxpayers under the tax net through reforms in tax systems, expansion of tax scope in order to motivate taxpayers and e-TIN holders to submit their annual tax returns voluntarily.
The Income Tax Departments have already taken steps for the return submission of non-filer companies.
The NBR and the Institute of Chartered Accountants of Bangladesh (ICAB) have jointly introduced the Document Verification System (DVS) to determine the authenticity of the audited statements of accounts submitted by the taxpayer companies.
This initiative will bring transparency to the disclosed income of the companies.
An activity regarding system integration between the National Board of Revenue and Bangladesh Road Transport Authority is underway with a view to exchanging data, pulling and storing data, and checking the authenticity of stored information.
This initiative will be helpful in the identification of new taxpayers and the prevention of tax evasion.
Additionally, an e-TDS system for tax collection and monitoring has been implemented.
The government has taken all necessary measures so that taxpayers can submit their annual income tax returns online starting this year. Consequently, the number of new taxpayers will also increase, according to the document.
After simplification of the Value Added Tax Act and rules in accordance with international best practices for creating a business-friendly environment, the Value Added Tax, and Supplementary Duty Act, 2012 has been implemented since July 1, 2019.
Automated online registration is a mentionable achievement of this Act, it said.
So far, more than two lac taxpayers have received 13 digit registration numbers online. To make the registration system more dynamic and reliable, efforts are going on for establishing interfaces with the Registrar of Joint Stock Companies and Firms, Office of the Chief Controller of Imports and Exports, National Identification Card authority, City Corporations, and Commercial Banks.
The VAT Online Project is working to bring transparency in VAT collection and establishing an ICT-based VAT administration system.
This initiative has resulted in the submission of about 70% online VAT return so far.
In order to ensure easy, transparent, and hassle-free VAT collection, from August 2020, The NBR has started installing EFD (Electronic Fiscal Device) or SDC (Sales Data Controller).
3,000 EFDs or SDCs have been installed in business establishments in Dhaka city so far under this project.
To make this initiative 100% effective, the consumers are being rewarded through lottery on EFDMS issued invoices every month.
A new Customs Act, 2021 is being formulated in accordance with international best practices followed in worldwide customs management.
The Customs Department has been using an automated customs management system for a long time. The activities of the Customs Department are being operated under the Web-based ASYCUDA World system interfacing with the computer system of the Bangladesh Bank, the Sonali Bank, the Navy, and the Chittagong Port Authority.
It has facilitated E-LC monitoring, money laundering prevention, dangerous cargo monitoring, as well as the management of imported and exported goods and containers through the sharing of information.
Different types of reform activities are going on to enhance the capability of the revenue administration, the document said.
All the training academies under the National Board of Revenue have been modernized where time befitting training activities are being organized regularly.
Expansion of revenue administration including the NBR is going on with a view to improving the quality of services and enlarging the scope of the tax.