Non-tax revenue faces big shortfall

The government's non-tax revenue (NTR) income is expected to see a major shortfall this fiscal (2014-15) as the top stakeholders are paying less than what they had pledged earlier.
Incomes from the Bangladesh Bank (BB) and the Bangladesh Telecommunications Regulatory Commission (BTRC) and land revenue may fall sharply this fiscal, officials familiar with the development have told the FE.
The central bank has paid only Tk 16.0 billion (1,600 crore) so far in the current fiscal against Tk 36.0 billion paid in the fiscal year (FY) 2013-14.
"We came to know the central bank would not pay any more this fiscal," said an official at the Finance Division.
Finance division sources said the shortfall might be at least Tk 20 billion (2,000 crore) at the end of the current fiscal.
But the official figures on collection of NTR during the first four months of the current fiscal speak of a far grimmer outlook.
Up to October last the government earned Tk 72.79 billion against Tk 114.63 billion in NTR in the corresponding period of the previous fiscal year.
Sources at the BB said they had paid Tk 16.0 billion as their profit had shrunk.
Finance Division sources said the central bank's profitability fell following the government's lower borrowing from banks through different tools.
The BB pays interest at the rate of 5.25 per cent on bills sold under the reverse repo to banks and it has resulted in a fall in its profitability.
On the other hand, the BTRC in its latest meeting with the finance division said they would not be able to pay Tk 100 billion. Instead, they would pay Tk 80 billion in the current fiscal.
They argued that the growth in mobile phone companies' income from the 3G (third generation) services remained much lower than expected.
The government gets spectrum fees from the mobile phone operators on conversion of their users' devices to 3G.
Mobile phone operators said the use of 3G-enabled smart phones grew fast mainly in urban areas, not in rural areas.
However, the income in the form of land revenue also remained low this time, according to the finance division sources.
Finance division officials said they needed an accurate forecast on NTR. And for doing that they also needed a guideline on profit sharing of the state-owned organisations.
Currently Bangladesh has more than 300 state-owned enterprises (SoEs) and organisations. A number of them can retain their profits. An official who has been working on the guideline told the FE that they were at the final stage of framing it.
The government gets NTR from the state-owned organisations mainly on their dividends and profits, interest, fine, penalties, receipts for services, rents, leases, tolls, levies and defence receipts.
The government earned NTR worth Tk 264.93 billion in the FY 2013-14. In the current fiscal year the target is Tk 276.62 billion.
jasimharoon@yahoo.com