Al Amin :
The National Board of Revenue (NBR) will have to work hard to mop up additional revenue to finance the government’s development and non-development expenditure in the upcoming fiscal year (2022-23), the economist said.
They said Bangladesh economy is on the recover tract from the fallouts caused by two years of Covid-19 pandemic. But geopolitical tensions due to the Russia-Ukraine war causes a concern over a sustainable recovery when the global economy faces set back due to the war.
“The government will have to spend more in the upcoming fiscal to boost aggregate demand to keep the economy buoyant,” said economist Dr Zahid Hussain.
In the post-Covid period, there will have a little chance to increase tax rate. In fact, in some cases, the NBR will have to either reduce the tax rate or waive to give a fresh boost to the factory production and keep commodity market stable in the days to come. Besides, the country’s small and medium companies have yet to be rebounded fully from the pandemic shock and the existing 14 per cent revenue growth, based import, may not last during the upcoming fiscal year. Under these circumstances, additional revenue general will
be the big challenge for the NBR and the board will have to focus on domestic sectors, the economists said.
In this regard, revenue targets set out in the upcoming national budget will have to be fulfilled through strong monitoring and enforcement mechanisms, they said.
Most importantly, NBR’s unfinished task to reform the tax system needs to be addressed immediately, they added.
Dr Syed Aminul Karim, former member (Tax) of the NBR, told The New Nation on Monday, “The taxpayers will not be able to pay taxes as their income have reduced by around 30-40 per cent. So, the increased revenue target will be a challenge.”
Besides, the implement of compliant of the Document Verification System (DVS), the newly introduced corporate return submission system, may decline tax collection from the corporate taxpayers, he said.
The corporate taxpayers contribute the lion share in direct-tax receipts for the public exchequer. But the revenue board received 14,905 tax returns from the corporate out of 30,000 received every year till February, according to the NBR data.
The extended deadline for submission of the tax returns is going to be expired on May 15, 2022.
On the other hand, the government will have to extend support to the poor and low-income households through increasing supplies of basic commodities in the market and also continue the stimulus packages for small enterprises.
The purchasing power of people will have to be enhanced by putting money into their hands. It will boost aggregate demand and keep the economy rolling.
Besides, the government will have to provide subsidies to important sectors such as fuel, power and agriculture for a few months. It will require more funds and the government will seek to increase more revenue through the NBR. “Following this, the revenue generation by increasing tax net will be the big challenge for the NBR,” Dr Zahid Hussain, former lead economist of the World Bank, Dhaka office, told The New Nation.
He further said the present revenue collection growth is mainly import-based for higher commodity prices in the international markets and it may not last in future.
So, the NBR should focus on domestic market for generating revenue, he suggested.
