The government has raised the revenue target for the current fiscal by Tk 30 billion in a bid to brace for the adverse impact of the economic downturn by strengthening domestic revenue-base. The ministry of finance (MoF) in a recent order instructed the National Board of Revenue (NBR) to collect the additional amount from its three wings -- income tax, Value Added Tax (VAT) and the customs. The collection target for the income tax wing has been raised by Tk 11 billion, while for VAT, by Tk 12 billion and for the customs by Tk 7.0 billion. The collection target for NBR has been re-fixed at Tk 755.90 billion from the earlier Tk 725.90 billion for the current fiscal. Officials said the MoF has raised the target, following the 'outstanding performance' of NBR in revenue collection in the current year. However, field officials have expressed their doubt about achieving the highest-ever revised revenue collection target in the last quarter due to a sluggish income-earning trend of the large taxpayers. Talking to the FE Monday, noted economist Mostofa K Mujeri said it is not impossible for the revenue board to achieve the revised target. "There are large potential sectors that remain untapped. The NBR can raise revenue collection by removing loopholes and checking tax evasion," Mujeri said, who is director general (DG) of the Bangladesh Institute of Development Studies (BIDS). Responding to a question about higher tax burden on the citizens, he said the existing tax-GDP (gross domestic product) ratio in Bangladesh is the lowest in the region. "The tax-GDP ratio should be 14 to 15 per cent in the present economic situation. It is now below 10 per cent," Dr. Mujeri said. It's time to revitalise the tax system by introducing new tax measures like property tax, he added. The revenue board will have to ensure a taxpayers' friendly situation and remove the fear-factor to encourage people to pay tax, he added. There must be sufficient efforts to remove mistrust of the people about the tax department, he said. In the first half of the current year, revenue collection posted 27 per cent growth with the impressive performances being those of income tax and VAT wings. During the July-December period, the NBR collected Tk 335 billion taxes against Tk 263 billion in the previous corresponding period. Income tax collections achieved the highest growth of about 34 per cent, followed by VAT's 31 per cent and the customs' 13 per cent during the period. Last year, the NBR exceeded its revenue collection target for fiscal 2009-2010 surpassing it by nearly Tk 8.0 billion. VAT collection has exceeded its target by Tk 7.0 billion, while income tax earnings, by Tk 5.27 billion last fiscal. The revenue board collected Tk 617.98 billion in revenue against its target of Tk 610 billion in fiscal 2009-10. The NBR failed to achieve its target in fiscal 2008-09. The revenue board collected Tk 525 billion revenue against its target for Tk 530 billion during the year.
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