Al Amin :
The government aims to collect revenue worth Tk18.51 lakh crore over the next three years, a target that may be challenging to meet without significant tax administrative reforms. This ambitious goal is set to address budget deficits and keep borrowing at manageable levels, according to Finance Ministry sources.
Of this total, the National Board of Revenue (NBR) is expected to collect Tk16.64 lakh crore, with the remainder coming from non-tax revenue, according to the ministry’s projections. The NBR’s target for the next fiscal year (2024-25) is set at Tk4.80 lakh crore, which is Tk70,000 crore higher than the revised target for the current fiscal year.
Experts have labeled this target as ambitious and suggested implementing comprehensive reform programs in the tax administration to encourage compliance from individual taxpayers and companies. They also emphasize the need for increased use of modern technologies to streamline tax collection and simplify the tax payment system.
Ministry officials indicate that a significant portion of future revenue will come from direct taxes. They plan to widen the tax net and improve the efficiency of revenue officials. Additionally, the government aims to rationalize current tax exemptions and enhance transparency in budget formulation.
According to the Finance Ministry projection, the average annual growth in total revenue collection will be around 13 percent during the fiscal years 2024-25 to 2026-27. The projection also stresses that increasing revenue collection and achieving the desired tax-GDP ratio is crucial for continuing the country’s economic development.
The government is attempting to make the revenue administration more efficient and effective by implementing necessary changes and reforms in tax policy and revenue management in the medium term. However, the country’s economic structure, large informal sector, tax evasion, structural weaknesses, complex tax collection system, information disparity, and a culture of tax reluctance contribute to lower-than-desired revenue collection in Bangladesh.
As Bangladesh continues to underperform in revenue collections, the International Monetary Fund (IMF), which has committed to lending $4.7 billion to Bangladesh, has expressed its disappointment over the slow pace of reform in the tax sector and voiced concerns that Bangladesh may not achieve its collection targets.
The NBR ended the last fiscal year 2022-23 with a revenue shortfall of Tk44,000 crore, and a similar shortfall may persist in the current fiscal year (2023-24).
Dr. Ahsan H. Mansur, Executive Director of the Policy Research Institute (PRI), told The New Nation, “The government undertakes revenue sector reforms in the proposed fiscal policy aligning with the IMF recommendations. But, no significant actions have been taken so far.
“The digitalization of tax, value-added tax (VAT), and customs procedures has been a long-discussed issue and there is little time to waste in automating the tax administration to ensure compliance, which is one of the reasons for the country’s low tax-to-GDP ratio,” he said.
“It is crucial to implement sustainable, effective, and comprehensive automation, as well as establish inter- and intra-agency connections within the government, in a short time, to enhance the tax-to-GDP ratio,” Mansur added.