Home ›› 18 Apr 2022 ›› Front
The government is likely to target Tk 4,33,000 crore in revenue earnings for the upcoming fiscal year which is 9.8 per cent of the Gross Domestic Product (GDP) and 11 per cent higher than the target set for the current 2021-2022 fiscal year.
The target was fixed in a meeting of coordination council on budget management and finance and currency exchange rate on Sunday. Finance Minister AHM Mustafa Kamal presided over the meeting at the finance division of the Ministry of Finance. The meeting was also attended by Bangladesh Bank Governor Fazle Kabir and Finance Secretary Abdur Rouf Talukder among other high officials.
Of the total revenue target, National Board of Revenue (NBR) would collect Tk 3,70,000 crore (8.4pc of GDP) while non-NBR revenue collection goal will be Tk 18,000 crore (0.4pc of GDP) which is 13 per cent higher compared to current FY, sources said.
The amount of non-tax revenue has been fixed at Tk 45,000 crore for the next fiscal year.
“The meeting has finalised targets on revenue and subsidies for the next fiscal year. There might be some minor changes on the targets in the final budget documents,” a senior finance official told The Business Post.
“ WE are hopeful that the targets will be achieved as normal business activities have resumed after a long topsy-turvy situation in the economy due to the prolonged effects of the Covid-19,” he added.
In the incumbent fiscal year, the target of revenue collection by NBR is Tk 3,89,000 crore and non-NBR revenue collection goal Tk 16,000 crore.
Besides, Tk 43,000 crore was non-tax revenue collection target in the incumbent fiscal year which has been fixed Tk 45,000 crore for the upcoming FY.
Although, the government has 11 per cent higher revenue collection target for the current fiscal year it has failed to achieve the target in the first eight months of current FY(July to February). During the period, the revenue board managed to collect only 53.47 per cent of the yearly revenue target.
To achieve the target, NBR has to collect Tk 3,385 crore in the remaining each month which is quite rare in its past history. On average Tk 22,000 crore have been collected in past eight months.
Every year, the government fixes a target for revenue collection by the NBR in the national budget which slips down in the revised budget after the conclusion of FY that showed significant down trend in the past two years.
According to the data of NBR, Tk 66,378 crore, which is the highest amount of revenue was collected from the local level vat and supplementary duty during the first eight months of the current fiscal year , marking a 10.65 per cent growth over the same period of last fiscal year.
On the other hand, revenue collection at import level witnessed an increase of 22.79 per cent by collecting Tk 56,776 crore. Tk 52,854 crore came from income tax or direct tax marking a 13.28 per cent growth.
In the upcoming fiscal year (FY 2022-23), the government intends to spend Tk 57,045 crore or 1.90 per cent of GDP on subsidies for the power, liquefied natural gas (LNG), agriculture, and food sectors.
The increased allocation is up 72.8 per cent from Tk 33,000 crore or 1.17 per cent of GDP earmarked for the current fiscal year (FY 2021-22).
However, this time the highest allocation is not going to the agriculture sector, as was the case for a few previous budgets. Instead, the power sector will receive the most funding, followed by LNG and agriculture, meeting sources said.
‘‘Subsidy is going to be the real game changer in the next budget. Huge subsidy burden may bloat the budget deficit in both current and next fiscal budgets,” an additional secretary of the finance division under the finance ministry told The Business Post.
Of the total draft budget outlay of Tk 6,77,864 crore, allocation for Annual Development Programme (ADP) will be Tk 2,46,207 crore or 5.6 per cent of GDP and the total budget expenditure will be Tk4,31,864 crore or 15.4 per cent of GDP.
According to Finance Ministry, the power sector will receive a maximum subsidy of Tk 18,000 crore in the coming fiscal year, which is double the Tk 9,000 crore in the current fiscal year. If the price of power is not adjusted in the coming fiscal year, the subsidy amount will be required, the meeting observed.
Similarly, the LNG sector will receive Tk 17,500 crore in subsidies, which is more than double the Tk 8,500 crore earmarked in the current fiscal year. If the price of gas is not upwardly adjusted, additional funds will be needed to cover the cost of LNG imports as well as interest and subsidies on the incentive package, meeting sources said.
According to government estimates, supplying LNG to industries and manufacturers at import price will raise the cost of doing business. As a result, in response to the requests of industrialists, the government is planning to subsidise gas in the next fiscal also.
If fertilizer prices remain unchanged, Tk 15,000 crore will be needed in agricultural subsidies in the coming fiscal year. The current allocation is Tk 9,500 crore.
Food subsidies will also rise by Tk 745 crore to Tk 6,745 crore in the coming fiscal year, while this sector receives a Tk 6,000 crore subsidy in the current financial year.
