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Tax collection target likely to be Tk 3.25 trillion for FY '20

Doulot Akter Mala | Published: May 24, 2019 09:23:41 | Updated: June 14, 2019 12:12:09


Tax collection target is likely to be set at Tk 3.25 trillion for the upcoming fiscal year with 16 per cent growth over the revised goal of FY 2018-19.

At Tk 1.17 trillion, the highest tax collection figure may be set for the Value Added Tax (VAT) wing, as the authorities aim it big on implementation of the new VAT law, finance ministry officials, said. The law is scheduled to come into force from July 01, 2019.

Finance minister AHM Mustafa Kamal is expected to propose the tax collection target in the budget speech on June 13.

The income tax wing of the National Board of Revenue (NBR) is projected to collect Tk 1.15 trillion while the customs wing Tk 923.40 billion.

Experts and economists said the tax collection target is ambitious considering lack of reforms in tax administration and automation of tax collection procedures has yet to take place.

Citing a large amount of shortfall in revenue collection in the first three quarters, they said the actual receipt might be Tk 2.25 trillion in the current fiscal.

Despite revising the target downward to Tk 2.80 trillion from the original Tk 2.96 trillion, the NBR would not be able to achieve it, they said.

Actually, the implementation of the new VAT and Supplementary Duty Act-2012 are unlikely to leave any significant impact on tax collection.

Dr Ahsan H Mansur, executive director of the Policy Research Institute (PRI) of Bangladesh, predicted that the revenue collection shortfall might reach around Tk 600 billion in the current fiscal against the revised target.

According to the projected deficit, the target for the upcoming fiscal has been set expecting a 44 per cent growth over the revised goal, he said.

"The target is quite impossible for the NBR to achieve unless it brings any qualitative change in the tax administration," he added.

He said large deficit in revenue collection target affects the government's long-term policy.

Tax officials complain of lack of capacity. A senior tax official said the expansion of the tax department along with increasing the logistics support is required to intensify tax collection drive by taxmen.

The incidence of tax evasion is high in Bangladesh as only less than 2.0 million taxpayers submit tax returns out of its population of 160 million.

"Even though the number of registered taxpayers having the Taxpayers Identification Number (TIN) is more than double the tax return files," he said.

The NBR would be able to bring new taxpayers under the tax net if the government focuses on its capacity building, he said.

To collect taxes worth Tk 100, the administrative expenditure of the NBR is only Tk 0.77, he said quoting annual report of tax collector.

Officials said they could not tap the potential sectors due to limited capacity, manpower and logistic support.

According to the revised target, the NBR will have to collect Tk 1.04 trillion VAT, Tk 966 billion income tax and Tk 794 billion customs duty in the current fiscal.

Until March, the NBR collected Tk 1.53 trillion in taxes recording a poor 7.11 per cent growth over the corresponding period of last year.

To achieve the revised target, the NBR will have to collect Tk 1.27 trillion worth of taxes in the remaining months of May and June.

doulot_akter@yahoo.com

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