An upscale proposed national budget worth Tk 9.38 trillion say less in its fiscal measures how the government will mobilise around 51-percent higher revenue in the next fiscal year.
A wide range of tax incentives for boosting local manufacturing industries has shown the government's intention not to go aggressive for revenue mobilisation, whereas the tax revenue- collection target for the National Board of Revenue (NBR) seems overambitious given the current fiscal year's lax performance.
Economists fear a record Tk 1.0-trillion shortfall in tax-revenue collection this year.
If such a big shortfall happens, the NBR will have to collect Tk 2.0 trillion in additional revenue to achieve the Tk 6.04 -trillion target set for the upcoming fiscal year 2026-27.
The government eyes Tk 2.23 trillion each from income tax and travel tax, and value-added tax (VAT) at local stage for next tax year. Target for import and export taxes is set at Tk 1.57 trillion.
As per the finance bill 2026, accompanying the budget, a number of final settlement provisions (FSP) that allow a reduced or concessional tax rates has been eliminated. Taxpayers will have to pay tax at regular rate on export cash incentives, saving- certificate interests and some more areas.
A reduction in source tax on cash incentives would increase revenue collection due to elimination of the FSP.
The government also expects Tk 60 billion in additional revenue through imposing a 0.20-percent tax on around 5.0 million retailers across the country.
Debabrata Roy Chowdhury, Director-Legal, Regulatory and Scientific and Corporate Affairs at Nestlé Bangladesh, says it would be nightmare to implement the new tax on retailers as no such system has developed yet to net them.
From tobacco, the NBR also expects additional Tk 60-billion revenue due to changes in price slabs.
Talking to the FE, revenue officials said central data integration with national identity card, banks, utility services, sub-registry office, mandatory BIN and TIN for bank-account opening would help in widening tax base and generating revenue.
They have also pointed out some potential sectors, including advance tax for B2B, tax hike on high-net-worth individuals, unchanged corporate tax rates for next five years, twofold hike in tax on savings certificates, reducing investment rebate on savings certificates and scrapping the final settlement provision (FSP).
Currently, the savers in the national savings scheme are enjoying the 'FSP' where source tax paid on interest amount of savings tools is considered finally paid taxes.
Under the proposed measures, savers in NSC would have to add their profits to the annual income and have to pay tax at the regular rate instead of reduced tax rate. However, paid tax at source would be adjusted with the payable taxes.
With this, marginal taxpayers will get refund if their total tax liability is lower than TDS while middle-and high-income taxpayers have to pay higher taxes.
The provision, however, considers women and senior citizens concerned leniently as many of them depend on the secured investment profits to run their living expenses.
Shahida Begum, a 73-year-old housewife in Mirpur, says profits from NSC are her main sources of income to pay house rent and other living expenses.
"We are not yet comfortable with the different bank schemes or bond purchase. Changes from savings certificates to other savings scheme are not easier for senior citizens like us," she says.
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