Home ›› 09 May 2022 ›› Front
The government is going to expand the value added tax (VAT) network in the next fiscal year, as it eyes to earn Tk 1,36,900 crore, or 37 per cent of the total revenue fixed in the head of NBR revenue.
The amount is the highest among all three heads falling under the National Board of Revenue (NBR). They are- VAT, income tax, and customs duty.
“Expanding the VAT network and plugging the VAT evasion are two major objectives of the NBR for the next fiscal year,” a Member of the revenue board told The Business Post on Sunday.
“We are not going to hike the VAT rates in the budget.”
The NBR has set a target of Tk 3,70,000-crore revenue from duties and taxes for the next financial year, of which 37 per cent or a Tk 1,36,900 crore is expected to be collected from local source.
The revenue objective for the next fiscal is about 11 per cent more than what was originally for the current financial year and 21 per cent more than the revised target.
On average, a Tk 30,833 crore has to be earned from import duty, VAT, supplementary duty, advance tax and other types of taxes every month. This figure was obtained by analysing the target data of the NBR.
The upcoming fiscal year is very difficult in terms of Ukraine-Russia war that leaves an impact on the world economy and the yet-to-be ended pandemic. Amid such a situation, the government is going to declare a new budget on June 9.
Ensuring funding in the budget for FY 2022-23 will be a big challenge. The major source of funding is the accumulation of internal resources and revenues. The government has to rely on the NBR for this, official sources said.
Talking to the finance ministry and the NBR officials, it was learned that another ‘ambitious’ revenue collection target for the next financial year is being set for the NBR.
Revenue from income tax and travel tax has been set at Tk 1,22,100 crore which comprises 33 per cent of the total earning. Besides, revenue from import and export is targeted to be Tk 1,11,000 crore.
The target for revenue collection in the current financial year was Tk 3,30,000 crore primarily. Due to deficit, the revised target was later reduced by 9 per cent or Tk 25,000 to Tk 2,95,000 crore. As such, the revenue collection target will increase to Tk 75,000 crore in the next financial year.
However, the NBR cannot achieve the target in any year. It has to be amended and reduced every time. In the end, it is not possible to achieve that revised goal. In the last financial year, about Tk 2,60,000 crore was collected. The deficit was about Tk 41,000 crore.
Describing the proposed targets for the next budget as highly ambitious, revenue experts say the government is going to set the ambitious revenue targets with the aim of spending more in the budget, which is not in line with reality.
Just as the NBR does not have the capacity to levy such high taxes, so does the economy. They suggested setting revenue targets in line with realities.
Asking not to be named, an official of the finance ministry involved in the preparation of the budget said the country’s economy has turned around after overcoming the corona crisis.
“Trade is back to normal. This has had a positive impact on revenue. Hopefully, this trend will continue in the new financial year and the collection will increase further,” he pointed out.
The latest figure from the NBR shows that the growth in revenue collection till March was over 16 per cent, the highest in recent years.
An NBR official, who did not want to be named, said domestic economy has recovered due to Pahela Baishakh and Eid. In addition, imports have also increased.
“For all these, collection will go up further in the last two months of this year and it will be possible to achieve the target by the end of the financial year,” he claimed.
The National Board of Revenue is the largest provider of funding in the national budget. The organisation provides 85 per cent of the total funding from Vat, income tax and import duty. The highest amount of 39 per cent comes from VAT.
