Kazi Zahidul Hasan :
The government’s revenue collection has shown huge shortfall in the first nine months of the current fiscal year putting its finances under severe pressure.
To cope up with the situation, the government has already trimmed the size of this year’s development budget and revised the tax revenue collection target downward for the National Board of Revenue (NBR).
The government had earlier set revenue collection target at Tk 3,39,280 crore for the fiscal year 2018-19, with a 30.08 per cent growth over the revised budget of the fiscal year 2017-18.
Out of the total revenue, the target for NBR was Tk 2,96,201 crore.
But the overall revenue collection by the NBR fell short of the target by Tk 51,000 crore in the first nine months of the current fiscal year 2018-19 due to lack of reforms and tax evasion and inadequate capacity of the NBR to fetch tax.
“The pressure on government finances is arising mainly from the revenue shortfall,” Dr Ahsan H Mansur, an Executive Director of Policy Research Institute, told The New Nation yesterday.
He pointed that collection shortfall had already reached Tk 51,000 crore during the first nine months of the current fiscal, indicating that the NBR may witness a significant amount of shortfall.
“The shortfall will limit the government’s ability to finance the development projects as well as executive the budget,” said Dr Ahsan H Mansur adding, “The government has already reduced investment spending to cope with the shortfall in revenue receipt,” he noted.
He, however, cited that shortfall was anticipated, as the revenue collection target remained highly ‘ambitious.’
The National Economic Council (NEC) earlier approved the revised Annual Development Programme (ADP) for the current fiscal year at Tk 1, 65,000 crore, trimming the original outlay by Tk 8, 000 crore or 4.62 per cent due to resource constraints and slower progress in project implementation.
The allocation at the original ADP for the current fiscal (FY) 2018-19 was Tk 1,73,000 crore.
Besides, the Ministry of Finance (MoF) has cut the NBR’s revenue collection target to Tk 2,80,630 crore from the target of Tk 2,96,000 crore considering the huge collection shortfall in July-March period of the current fiscal year.
“The deficit in revenue collection poses a big challenge for the government in meeting the need of development expenditure. To bridge the gap, the government may go for more internal borrowing and it in turn could lead up to a higher debt and expenditure to the head of interest payment,” Dr AB Mirza Azizul Islam, former Adviser to the caretaker government told The New Nation.
He said, NBR has offered significant tax exemption before election following persuasion of various influential quarters, which might be one of the reasons behind the widening shortfall in revenue collection.
The overall economic activities also remained slow before election that also resulted in revenue collection shortfall.
When asked, Dr AB Mirza Azizul Islam said that the government should look for more foreign fund to finance this year’s development spending.
NBR collected Tk 1,86,000 crore revenues in the fiscal year 2017-18, achieving a 19 per cent growth.
The government’s revenue collection has shown huge shortfall in the first nine months of the current fiscal year putting its finances under severe pressure.
To cope up with the situation, the government has already trimmed the size of this year’s development budget and revised the tax revenue collection target downward for the National Board of Revenue (NBR).
The government had earlier set revenue collection target at Tk 3,39,280 crore for the fiscal year 2018-19, with a 30.08 per cent growth over the revised budget of the fiscal year 2017-18.
Out of the total revenue, the target for NBR was Tk 2,96,201 crore.
But the overall revenue collection by the NBR fell short of the target by Tk 51,000 crore in the first nine months of the current fiscal year 2018-19 due to lack of reforms and tax evasion and inadequate capacity of the NBR to fetch tax.
“The pressure on government finances is arising mainly from the revenue shortfall,” Dr Ahsan H Mansur, an Executive Director of Policy Research Institute, told The New Nation yesterday.
He pointed that collection shortfall had already reached Tk 51,000 crore during the first nine months of the current fiscal, indicating that the NBR may witness a significant amount of shortfall.
“The shortfall will limit the government’s ability to finance the development projects as well as executive the budget,” said Dr Ahsan H Mansur adding, “The government has already reduced investment spending to cope with the shortfall in revenue receipt,” he noted.
He, however, cited that shortfall was anticipated, as the revenue collection target remained highly ‘ambitious.’
The National Economic Council (NEC) earlier approved the revised Annual Development Programme (ADP) for the current fiscal year at Tk 1, 65,000 crore, trimming the original outlay by Tk 8, 000 crore or 4.62 per cent due to resource constraints and slower progress in project implementation.
The allocation at the original ADP for the current fiscal (FY) 2018-19 was Tk 1,73,000 crore.
Besides, the Ministry of Finance (MoF) has cut the NBR’s revenue collection target to Tk 2,80,630 crore from the target of Tk 2,96,000 crore considering the huge collection shortfall in July-March period of the current fiscal year.
“The deficit in revenue collection poses a big challenge for the government in meeting the need of development expenditure. To bridge the gap, the government may go for more internal borrowing and it in turn could lead up to a higher debt and expenditure to the head of interest payment,” Dr AB Mirza Azizul Islam, former Adviser to the caretaker government told The New Nation.
He said, NBR has offered significant tax exemption before election following persuasion of various influential quarters, which might be one of the reasons behind the widening shortfall in revenue collection.
The overall economic activities also remained slow before election that also resulted in revenue collection shortfall.
When asked, Dr AB Mirza Azizul Islam said that the government should look for more foreign fund to finance this year’s development spending.
NBR collected Tk 1,86,000 crore revenues in the fiscal year 2017-18, achieving a 19 per cent growth.
