Although there are doubts about fulfilling the target in the current fiscal year, the revenue target of the National Board of Revenue (NBR) is being increased in the next financial year as well.
NBR has proposed to increase the revenue collection target in the upcoming 2022-23 fiscal year by Tk40,000 crore more than the current fiscal year.
For the upcoming financial year, the target has been set at Tk3.7 lakh crore, which is 12.12% more than the current fiscal year.
In the current FY22 fiscal year budget, the target of total revenue income has been set at Tk3.89 lakh crore. Among these, NBR's target is Tk3.3 lakh crore.
According to a senior Finance Ministry official, the ministry has recently sent a letter with a ceiling of Tk3,7 lakh crore for the next fiscal year.
Asked about this, NBR member (VAT implementation) Abdul Mannan Sikder said: “We are now working on figuring out how much revenue target can be set from which sector. I think this goal is achievable.”
But according to the NBR's latest data, they missed the revenue collection target in the first ten months (July-April) of the current fiscal year.
However, revenue has increased compared to the same period of the previous fiscal year.
NBR has collected Tk2.27 lakh crore during the first ten months of FY22. The target for the period was set at Tk2.6 lakh crore.
During the same period of the last fiscal year, this income was Tk1.97 lakh crore. As a result, in the first ten months of the current tax year, the income has increased by 15.21%.
According to former Bangladesh Bank governor Salehuddin Ahmed, higher revenue generation by boosting income taxes makes an economy strong and sound.
A lower-than-expected revenue volume is a headache for the economy of Bangladesh, he said, adding that funds for improvement in education, health and social protection remain short as a result.
Only 22.99 lakh of the country’s 62.77 lakh income taxpayer identification number (TIN) holders submitted their returns in FY22 while the figure was 22 lakh in both FY21 and FY20.
In FY16, some 12 lakh of the 19.79 lakh income TIN holders submitted their returns.
In contrast, the overall tax-GDP ratio in the country has remained below 9% for the past one decade.
The rate should have been higher as Bangladesh became a lower-middle-income country in 2015 as per the World Bank criteria, said economists.
Bangladesh is poised to become a developing nation in 2026 and is also on the course to being a middle-income country by 2030.
Former lead economist of World Bank’s Dhaka office Zahid Hussain said that much of the country’s success in its graduation to the upper statuses would depend on its revenue mobilization, especially from income taxes.
According to him, the collection of income taxes at various rates by the National Board of Revenue is a major flaw, which has created scopes for tax evasion and leakages.
“It is an open secret that there is collusion between businesses and tax people,” he said.
