Business Desk :
The government has projected a marginal improvement in the tax to gross domestic product (GDP) ratio in the 2022-23 fiscal, despite the Covid-19 taking a toll on the country’s revenue collections this financial year.
The tax-to-GDP ratio is a ratio of a nation’s tax revenue relative to its gross domestic product, the value of goods and services produced in a country during a certain period. The ratio is also a marker of how well the government controls a country’s economic resources.
According to an official document, the tax to GDP ratio in the current fiscal has been estimated at 11.9%, while it was 12.4% in the 2019-20 fiscal. Despite Covid hitting the revenue generating sectors hard, the government estimates it to rise to 12.2% in 2022-23, reports UNB.
The document, in possession with UNB, states that of the 12.2% of the projected revenue-GDP ratio in the next fiscal, 10.6% would come from the National Board of Revenue (NBR), 0.6% from non-NBR sources and the remaining 1.1% from non-tax sources.
Similarly, in the current fiscal, the government has projected to get 10.4% from the National Board of Revenue (NBR), 0.5% from non-NBR sources and 1% from non-tax sources.
In the 2019-20 fiscal, the government had originally projected to boost the tax to GDP ratio to 13.1% — 11.3% from NBR, 0.5% from non-NBR sources and 1.3% from non-tax sources. However, the target was subsequently lowered to 12.4% in the wake of Covid.
