THE government has offered around Tk 1.47 trillion in the form of tax exemptions at import stage to various sectors since 2014-15 fiscal year until January last, while each year budgetary size is increasing with high deficiency. The amount of tax, waived by the government, is nearly half of the current fiscal’s total tax-revenue collection target of Tk 2.96 trillion. It ultimately will result in Tk 441.17 billion revenue loss in 2017-18. What’s going on! At one side, the central bank is planning to offer generous scheme to big loan defaulters, on the other side National Board of Revenue (NBR) is allowing large amount of tax exemption to unproductive sectors. We must say, these efforts will ultimately make the country’s economy fragile.
In FY 2014-15, as reported in the leading business daily, the NBR granted tax exemptions of Tk 210.70 billion on the import stage, which doubled in FY 2017-18. Until last January, the NBR granted some Tk 271.08 billion as tax exemptions to various sectors. It doesn’t need to be an expert to say that such tax exemption is one of the major reasons for the failure in achieving the revenue collection target. The amount of revenue loss would go up significantly by the end of this fiscal following a substantial number of exemptions granted ahead of the last national elections.
The causes of tax exemption could be understood when we see lawmakers availed the duty-free benefit on car import of worth Tk 15.94 billion in the last four years and Tk 889 million until January of this fiscal. The NBR granted different special tax waivers valued at Tk 126.53 billion in different forms in the July-January period of this fiscal. To lure investment in the country’s economic zones, the government offered Tk 3.82 billion tax exemptions until January of the current fiscal, which was Tk 3.64 billion last year.
We think tax exemption to some thriving sectors to some extent would be advantageous for them. But in most times, these facilities are misused by the vested quarters. It is not understandable, why lawmakers would be given facilities to import latest model luxury cars without any duty. Here, tax exemption is totally unproductive.
