Finance Minister AMA Muhith is likely to propose a tax-revenue target of Tk 2.31 trillion in the national budget for the fiscal year (FY) 2016-17. The budget is set to be placed before parliament on June 02 next. The target set for next fiscal is 33.5 per cent higher than that of the current fiscal.
The next tax-revenue target is substantially higher than the original estimate of Tk 1.76 trillion in the current budget. The raise is envisaged by giving the domestic Value Added Tax (VAT) collection highest priority, taxmen and analysts said.
However, economists have found the tax revenue target for FY 2016-17 ambitious.
As already decided, the tax revenue is targeted at Tk 2.3152 trillion in the aggregate budget size of Tk 3.40 trillion for the financial year 2016-17.
The National Board of Revenue (NBR) recently gave its three wings their respective share of collection of the total tax revenue for the next fiscal.
The VAT wing is expected to contribute 37 per cent or Tk 741 billion of the aggregate revenue for financing the upraised budget.  Â
Income-tax-collection target has been set at Tk 733 billion or 36 per cent of the tax-revenue-collection target.
Customs wing will have to collect Tk 557 billion in tax revenue or 26 per cent of the aggregate.
Talking to the FE Tuesday, former finance adviser of the caretaker government Dr Mirza Azizul Islam said the target of tax-revenue collection has been set expecting 33.5 per cent growth which is not achievable.
"Such a growth in revenue collection never happened in the history," he said.
The revenue target should be set estimating 20 to 22Â per cent growth over the ongoing FY on the basis of 6.0 per cent inflation and 6.5 per cent real growth in gross domestic product (GDP) with the flow of revenue collection, he added.
About dependence on VAT, Dr Islam said the government would have to adopt a go-slow policy on implementation of the new VAT law and increase dependence on VAT collection.
There is an ongoing movement of businesses against the new VAT law, which may cause difficulty in administering the system, he noted.
Many of the revenue officials also rate the target for the upcoming FY as too ambitious like the current one, which may require downward revision.
They, however, said there is enormous potential to collect the targeted amount of revenue from the country's economy if the government can plug the loopholes of revenue leakage. Â
In the current fiscal, the government had set a target of Tk 1.76 trillion for the NBR. Later, it has been cut to Tk 1.50 trillion following a significant shortfall in tax-revenue collection in the first half of the year.
Officials expressed their hope that the tax authority would be able to achieve the pared-down target in FY 2015-16 as almost 70 per cent of the target had been met in the first three quarters.
The board collected Tk 1.05 trillion in tax-revenue in July-March period, which constitutes almost two-thirds of the revised target of Tk 1.50 trillion.
For the current FY, original target for VAT collection was Tk 639.02 billion that has been revised to Tk 540.64 billion.
Income-tax-collection target has been cut to Tk 534.36 billion from the original one of Tk 659.32 billion Revised target for customs wing is Tk 425 billion which was Tk 465.36 in the original one.
The NBR will have to collect Tk 445.68 billion or the rest 30 per cent in April-June period to get to the revised target.
Officials said revenue collection usually picks up in the last quarter of every year as development works get geared up at the fag-end of the fiscal amid haste for budget execution. Â
doulot_akter@yahoo.com
Substantial hike in tax revenue target likely
Doulot Akter Mala | Published: May 18, 2016 00:00:00 | Updated: February 01, 2018 00:00:00
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