90% of development projects are funded by the state now

The government's dependency on foreign direct funding (FDI) for development projects is declining, as 90% of development projects are now being funded by the state.

This does not mean that the people will be burdened with extra taxes; rather the National Board of Revenue (NBR) believes that it is possible to increase the revenue by reducing the tax but increasing the tax net.

There was a time when the government had to think of FDIs before planning any development project in the country and in those cases, there were many obligations from the donor countries which needed to be followed.

Most of the development projects of the government are now being funded from the state's own funds and the money for these development projects is coming from the income tax paid by the people, VAT and the revenue of the state.

The information came up in a discussion at the seminar organized by the NBR on the occasion of National Income Tax Day.

The seminar was titled "Role of Income Tax in Implementation of Vision and Building of Future Bangladesh" and was held at the meeting hall of the NBR building at Segunbagicha in the capital. 

Law Minister Anisul Huq attended the event as the chief guest.

NBR Chairman Abu Hena Md Rahmatul Munim said: “It is a great achievement for us, that more than 90% of the development projects in the country at present are being financed from our national revenue collection."

According to him, the NBR's motto is not to increase taxes but to increase the number of taxpayers.

“We have reduced the tax rate significantly to encourage more people to pay taxes," he said.  

"The NBR has been working to increase the total tax net, as a part of which we are now providing an online return service," he added. 

He also hinted that the rate can be reduced further depending on the expansion of the tax net in the country.

Reportedly, the number of registered taxpayers has increased by six folds in the last decade. 

It was also informed that the number of TIN-holders in the country was 6,840,000 till October.

Meanwhile, at the seminar, the Law Minister called for cooperation in the development of the country by increasing the revenue by paying income tax.

He said: “After the impact of Covid-19, the industrial establishments have started to return to their previous positions very fast and production has continued, which has a positive impact on the growth of revenue collection.” 

“The growth of income tax collection in the FY 2020-2021 has been 23.63%.” 

“During FY2019-2020, the amount of direct tax stood at 35.50% and the amount of indirect tax stood at 64.50%. The revenue objective of our Perspective Plan-2041 is to increase the government revenue to 19.55% and 24.15% of GDP in 2031 and 2041 respectively. In addition, the contribution of direct tax to the total revenue will be increased to 50% by 2041,” he said on the occasion of National Income Tax Day.

FBCCI President Md Jasim Uddin was the special guest at the seminar; General Secretary of the Bangladesh Economic Association Jamal Uddin Ahmed, NBR member Alamgir Hossain, Md Masud Sadiq and Sams Uddin Ahmed also spoke at the event.

Since 2016, the National Income Tax Day is observed every year on November 30 and it is also the last day for filing income tax returns.

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