Muhith: Revised budget early this fiscal year

Finance Minister AMA Muhith has said the budget for Fiscal Year 2017-18 passed on June 29 will be revised in February, earlier than scheduled, as non-implementation of uniform VAT law shoots up deficit. The finance minister spoke of economy and budget to a group of journalists in his secretariat on Saturday. Muhith said this year the revised budget announcement will be done a little early. “We have to do this as many figures in the current fiscal budget need to be matched as execution of new VAT law delays next two years.” The parliament passed the budget on June 29 with a size of Tk4,00,266 crore while the revenue target was Tk2,88,000 crore. The government aimed to generate more than Tk91,000 crore as revenue from VAT – one third of the total target of Tk2,88,000 crore, but deferral to the execution of new VAT law stood on the way. The government will face a shortfall of Tk20,000 crore for deferring the implementation of VAT law. “We have to make a larger revision of the budget to meet up the deficit.” He said most of the revenues are generated through corporate and income tax. A total of 29 lakh enterprises have Tax Identification Number (TIN) and submit tax returns, but they do not give tax. “We want that they pay tax from this fiscal year.” In reply to a question, Muhith said businessmen have opposed implementation of the new VAT law since they do not want transparency in trading and businesses. A big change took place in this fiscal year before passing the  budget in the Parliament, he said, adding that “There was no condition imposed by the International Monetary Fund for execution of new VAT”. Regarding cut in profit rate on the National Savings Instruments, the finance minister said the Finance Division  has decided to slash the profit rate on the savings certificates. It has also taken initiative to identify the enterprises that have already invested in the savings instruments, added the minister. Muhith said it is difficult to identify the 40% institutional investors of the total 17,000 savings instruments across the country.