NBR wants to bolster research wing

The National Board of Revenue (NBR) wants to strengthen its Research and Statistics wing in line with recommendations from local experts and foreign donor organisations.

The strengthening is needed to carry out the reforms necessary for the revenue board to ensure greater mobilisation of domestic resources, according to experts.

Addressing a recent meeting at the NBR conference room in the capital, its Director General (Research and Statistics) Abul Bashar Md Shafiqur Rahman said an economist should be recruited to make the research wing more effective and up-to-date for better analysis of data and statistics.

The NBR has lots of challenges, including mitigating fiscal pressure by collecting more revenue. It not only lacks the re-quired manpower but there is also a need to update and expand the Table of Organisation and Equipment (TO&E), officials said.

The NBR director general told the meeting more revenue officer and assistant revenue officer positions should be created to increase revenue collection.

He also said the research wing should have knowledge of the global economy.

NBR Systems Manager Md Fazlur Rahman said the board can think about updating the ICT wing recruitment rules.

It can appoint a member in the wing to strengthen the customs, tax, VAT, and board administration, he said.

Fazlur recommended creating an action plan for service automation in the NBR district offices.

“For complete digitalisation, the NBR should take the necessary steps ahead of the Smart Bangladesh Vision 2041 and also expand its organisational structure,” he added.

Other NBR officials attending the meeting also stressed creating more positions and recruiting the necessary manpower to collect more revenue.

Less expense, less revenue

Though the NBR collects around 85 per cent of the country’s revenue, it spends less on revenue collection compared to other nations. Its data shows the board spends Tk 0.21 to collect Tk 100 in revenue.

To collect the same revenue, neighbouring India spends Tk 0.60, Thailand Tk 0.71, Singapore Tk 0.79, Malaysia Tk 1, Ger-many Tk 1.5, and Japan Tk 1.7, according to the NBR data.

Insiders said spending less is not the NBR’s credit because it collects less revenue compared to other countries. Instead of spending less, they suggested regular reformation of the tax administration, investing in research and automation, and re-cruiting more skilled people.

According to the International Monetary Fund’s (IMF) World Economic Outlook 2022, Bangladesh’s revenue-to-GDP ratio is 9.61 per cent while it is 19.03 per cent in India, 26.41 per cent in Bhutan, 23.96 per cent in Nepal, and 12.06 per cent in Pa-kistan. Also, Bangladesh’s tax-to-GDP ratio is the lowest among South Asian countries.

Pressure mounts to meet IMF conditions

The Russia-Ukraine war, the forex crisis, and the government’s austerity measures slowed down tax collection in the first eight months of FY23.

The NBR has to meet several IMF conditions as part of the $4.7 billion loan programme. One of the conditions is to in-crease the tax-to-GDP ratio by 0.5 percentage points in FY24, 0.5 percentage points in FY25, and 0.7 percentage points in FY26.

To achieve the target, the NBR will have to collect an additional Tk 2,34,000 crore in revenue over the next three fiscal years.

Meanwhile, the government is likely to set a target for the NBR to collect Tk 4,30,000 crore in revenue in FY24. The target is 16 per cent (about Tk 60,000 crore) higher than that in the incumbent fiscal year.

Because of the slow growth in revenue collection, the NBR lagged behind Tk 22,978 crore against its actual target of Tk 2,19,015 crore during the first eight months of the current financial year.

If the revenue deficit widens to around Tk 30,000 crore at the end of FY23, the NBR has to collect 25 per cent more taxes and duties in FY24. The revenue board, however, never achieved such growth.