The government has revised downward its non-tax revenue (NTR) earning target for the current fiscal year (2014-15), 18 per cent below the original one, as its major sources failed to generate enough.
Officials said the NTR receipts projection has now been cut down to Tk 226.95 billion as against the original one of Tk. 276.62 billion amid sharp fall in earnings under some major heads. The finance authorities are now doing arithmetic for the budget for the next financial year.
Two major heads where NTR income has fallen drastically in the current fiscal year (FY) are the Bangladesh Bank and the Bangladesh Telecommunications Regulatory Authority (BTRC).
However, people familiar with the recent developments in the NTR told the FE that attaining even the revised target might prove challenging for the government.
A number of reasons they cited for such scepticism.
Earnings from smart-phone service remained below expectation, resulting in revenue fall from the BTRC.
They said a sum of Tk 50 billion in revenue targeted from next spectrum auction, to be participated by mobile-phone operators under the BTRC domain, looked uncertain for different causes.
The fresh schedule for auction is May 20.
The government was expecting at least Tk 50 billion from two types of spectrum auctions.
But it is now uncertain following a tussle between the NBR and the four mobile-phone operators over SIM-replacement tax issue.
Citycell and the state-owned Teletalk are not in the fray.
Sources hinted that earnings from the defence sources also might fall short of the target this financial year.
Government earns a significant amount of money for its exchequer from the UN mission under "defence" head.
However, the NTR collection from that source stood at nearly 48 per cent of the revised amount, or Tk 118.23 billion, in eight months to end of February.
It was much higher at Tk 174.41 billion in the same period in the fiscal 2013-14.
"We don't know what actual figure will be at the end of the fiscal year as we're still lagging behind," said a finance official.
He said: "If the auction does not take place in time, and it takes place in the next fiscal year, then earnings will be counted for the next year."
However, there is good news for the government from the Department of Immigration and Passport (DIP) as it might add up an additional amount of Tk 1.20 billion to the target for Tk 16.2 billion.
The earnings from the DIP are rising following fast MRP (machine-readable passport) conversion from the existing manual ones to meet an international requirement.
All passports must be converted into MRP within November this year as per a condition set by the international civil aviation authorities.
The earnings from administrative fees and fines might surge as a number of divisions have revised their rates following a move made by the finance division.
But, earning from the Bangladesh Railways is expected to fall this year, too, like in the past year, following political programmes that had spelt a 'disaster' for train schedules.
In the meantime, the central bank has paid only Tk 16.0 billion in the current fiscal-half the amount of Tk 36.0 billion paid in the fiscal year (FY) 2013-14.
The central bank will not pay anymore this fiscal year.
The finance division initially estimated Tk 100 billion from the BTRC. But now it looks down to Tk 70 billion through a downward revision.
Experts in finances told the FE that the profit of the central bank has fallen mainly for conducting 'sterilisation operations'.
The BB has purchased a substantial amount of foreign currency as a strategy to keep the US currency's exchange rate with the Bangladesh Taka stable, leading to rise in the net foreign assets.
For counteracting impact of the net foreign-asset increase on reserve money growth, the central bank had to step up sterilisation operation through reverse repo.
BB pays 5.25 per cent interest on the bill sold under the reverse repo to the banks, which eroded its profitability.
Dr Zahid Hussain, lead economist at the Dhaka office of the World Bank (WB), told the FE: "BB's interest expenses increase because of the increased size of reverse repo operations."
Dr Hussain noted there had been some erosion in the value of Bangladesh's international reserves, now estimated at $23 billion.
Bangladesh keeps her reserves mostly in dollar. Also, it keeps the foreign-exchange reserves in euro and pound sterling.
The reserves are usually kept in short-term US treasury bonds.
And the rate of short-term bonds in the USA remained low, Dr Hussain said, pointing out risk from the volatile euro front as well.
"If the value of the euro falls, then Bangladesh's value of reserve money also falls," the World Bank economist said.
However, a number of officials involved with the NTR told the FE that many state-owned organisations did not deposit profits with the national exchequer.
A legal bar blocks the way.
There is a law that the state-owned organisations reserve the right to retain all their profits for development purposes.
A move is underway to amend the law to clear the deck. But it takes time, the sources said.
Currently Bangladesh has more than 300 state-owned enterprises (SoEs) and organisations.
The government netted from the NTR Tk 243.01 billion in the FY 2013-14, according to the fiscal update-a monthly statement from the finance division.
Jasimharoon@yahoo.com
Non-tax revenue too eludes target
Jasim Uddin Haroon | Published: April 16, 2015 00:00:00 | Updated: April 15, 2015 23:35:27
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