Augmenting non-tax revenue

Non-tax revenue (NTR) rarely figures in discourses on revenue collection for the government. It is not exactly the missing of the wood for the trees but its metaphorical implication is not far from the idiom's message. The receipt of a paltry 1.0 per cent NTR of the GDP from a slew of departments of at least 30 ministries gives a clear idea of the abject neglect this important source of revenue collection is subjected to. True, there are ministries and departments that do not earn because they have not been developed as potential sources of income for them to meet up their expenditures and thus contribute to the government's coffer. Even the state-owned enterprises (SoEs) that earn revenue for the exchequer so underperform that the total has been languishing at around 1.0 per cent of the GDP over the past few years. Only in FY 2019-20, did this ratio rise to 1.10 per cent after a plunge to 0.91 in its previous year. Even last year's tax-GDP ratio was 8.54 per cent.

This is higher than the NTR but certainly not at the rate it should have been. Direct taxation and value-added tax (VAT) certainly receive the main focus from the policymakers and the National Board of Revenue (NBR) but again the performance leaves much to be desired. The tax net could not be expanded until now much to the chagrin of experts who have long been unanimous in suggesting serious efforts to bring all taxable people under the tax net. It seems the country is fated to deficit financing eternally. This cannot and should not be the way of developing the country financially, particularly when the number of millionaires in the country is increasing rapidly. According to a report, 3,640 new millionaires were added in just nine months of 2023 to its stock of 109,946 by December 2022.

There is no doubt that a greater emphasis has to be put on raising tax on such speedy acquisition of wealth not only in the interest of augmenting state income but also as part of a state policy on narrowing the socio-economic disparities. It is wiser not to focus on VAT or such indirect taxes where the poor and the rich have to pay the same amount of tariff. The interim government has an opportunity to play a pioneering role in this respect because it does not have dubious concerns for appeasing the business circles and the privileged like the regime under which graft was the order of the day.

With a marginal increase in NTR to Tk392.55 billion from the previous year's Tk 389.56 billion, the ministries obviously have a long way to go if the country desires for a transition from deficit financing to break-even or surplus financing of its budget. The other day, a contemporary carried a piece of news to the effect that a bridge has been making profit on top of the expenditure on it but the toll is still higher. That particular bridge is not likely to be the only case of such revenue churner; there may be many more. But the problem here is that the income lines more pockets than one would imagine. If the genuine incomes from the department of the 30 or so ministries found their unhindered ways into the exchequer, the total NTR would be much higher. Let the incumbent government ensure that this happens, no matter what.