NBR finds policies that could prevent reaching revenue collection targets

Business Desk :
The National Board of Revenue (NBR) identified four policies that could prove to be barriers to achieving revenue collection targets unless effective actions were taken to tackle it.
The measures are: higher import margins due to scarcity of US dollar, imposition of regulatory duty to restrict import of less important products, discouraging import of luxury goods and reduction of taxes on essential goods such as petroleum products, sugar, rice etc, according to a policy paper prepared recently.
The concerns were raised in a presentation of the customs wing made before a team from the International Monetary Fund (IMF) that visited Bangladesh recently and held a meeting with the National Board of Revenue (NBR) at its premises.
The customs wing shared with the team the country’s revenue growth trend, projections, future plans, automation updates and way forward of the NBR.
The NBR also pointed out four other challenges of revenue collection that included contractionary economic policies in most of the trade partners of Bangladesh.
Other challenges are: instability caused by the Russia-Ukraine war, unprecedented appreciation of the US dollar, and recession in major export destinations.
The customs wing showed the trends of goods import and revenue collection in the July-October period of 2022.
Data showed the revenue collection from import of goods dropped to Tk7,320 crore in October against Tk7,591 crore in September and Tk8,097 crore in August.
Import volume in October dropped to 11,518,313 tonnes, down by 11,580 tonnes and 180,563 tonnes against September and August this year.
The government has set a Tk370,000 crore revenue collection target for the current FY23.
To achieve the target, the NBR would have to collect Tk92,500 crore in each of the quarters until June 30 next year.
In Q1 (July-September) of the current FY23, the NBR collected Tk67,104 crore in tax revenue, achieving 16% growth against the corresponding period of last FY.
In the presentation, the NBR outlined a couple of its future plans that might also cause revenue reduction including rationalization of supplementary duty and RD to comply with commitments for graduation from the Least Developed Country (LDC) status, rationalization of the customs duty as committed to the World Bank, and outcome of any possible preferential trade agreement with any of the trade partners.
Officials said the IMF suggested NBR bring down the tax exemptions which would help increase the revenue collection.
In the paper, the customs wing of the NBR said that introduction of more advanced technologies in data analysis could be a way forward to combat the challenges along with proper collection of duty and taxes at all customs ports and stations.
The customs has developed interface with the Bangladesh Bank to interlink export-import data, introduced electronic payment of duty taxes, and launched a national single window and bond automation project.
The government set a Tk111,000 crore target in import and export duty collection for the current FY.