Taxmen sought a hefty allocation for vehicles as logistics support for compliance enforcement to achieve direct- tax -collection target in next fiscal as the IMF forwarded a revenue-raising recipe.
Taxmen presented an estimate of Tk 7.0 billion worth of allocation on account of vehicles to drive to the goal being set for tax mobilisation to make up for shortfalls.
The income-tax wing of the National Board of Revenue (NBR) has prepared the logistics budget recently approved by the Ministry of Finance (MoF) in a bid to meet the estimated shortfall in tax- revenue collection with an additional Tk 153 billion.
In a meeting with the International Monetary Fund (IMF) appraisal team Sunday at the NBR office in Dhaka, the income-tax wing of the NBR presented its logistics demand to meet the tax-GDP target that envisages 0.5-percent increase in the next FY, set by the multilateral development partner.
During the meeting, the IMF team recommended abolishing various tax expenditures on clothing, and footwear, liquefied petroleum gas, mobile phones etc, not to extend tax exemption for information communication and technology sector, abolishing the 'depletion allowance' provided for mining and petroleum extraction, imposing 15-percent VAT on businesses with turnover greater than Tk 30 million, allowing input- tax credits and eliminating the existing provision of truncated VAT for them.
The IMF also proposed eliminating or establishing caps on input-VAT deductions for entertainment and meals.
Sources have said the taxmen plan to cut assessment of tax files and focus on combating tax evasion through intensified enforcement next year.
Tax officials said a mail was forwarded to the IMF and the MoF regarding Technical Assistance on April 9, 2024 too.
It has identified TE areas including e-filing for corporate income tax, microsimulation modelling for tax expenditures, advance audit techniques and audit manuals.
For capacity building of tax officials, the wing has sought technical support so that taxmen can conduct revenue-and economic-impact analysis of policy design, and revenue forecasting methods and devise tax-enforcement strategies.
On outcome of the new Income Tax Act 2023, which came into effect on June 22, 2023, the income-tax wing has said the new act contributed to 20-percent-higher revenue-collection growth compared to that of previous year while the economy is still in contractionary mood.
In a presentation, placed before the IMF mission, the NBR said additional Tk 153 billion in income tax would be required to achieve the direct- tax-collection target of Tk 1.62 trillion, which is possible to mobilise unless the MoF and MoPA provide logistics-support allocations.
Target for income-tax collection is Tk 1.37 trillion in the current fiscal. Until March, the NBR had collected Tk 849 billion against its target of Tk 1.07 trillion for the period, achieving nearly 20-percent growth over the same period last year.
The NBR would need an additional Tk 334 billion to achieve the target for next financial year as per current FY target worth Tk 1.37 trillion. However, the NBR projected a Tk 85-billion shortfall in direct tax collection this year, estimating a maximum of Tk 1.29 trillion worth of taxes by the yearend.
The income- tax wing estimated revenue worth Tk 1.30 billion in the next FY by enforcing tax compliances followed by Tk 10 billion by limiting tax expenditure, Tk 2.5 billion by improving tax compliances.
The income- tax wing also eyes Tk 2.0 billion in additional revenue through identifying new taxpayers followed by Tk 10 billion internal and external system integration and Tk 12 billion through auditing withholding-tax returns, online CIT submission, field and desk audit and improving taxpayer services.
Officials said both the IMF and the NBR placed two separate presentations at Sunday's meeting.
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