IMF team skeptical about meeting loan conditions by NBR

Staff Reporter :
The visiting delegation of the International Monetary Fund (IMF) has expressed doubts over attaining conditions related to revenue collection by the National Board of Revenue (NBR).

The international lending firm is giving a loan of $4.7 billion to Bangladesh with some conditions.

Before disbursing the second instalment of the loan, the IMF delegation on Thursday met the officials of the three wings of the NBR separately in the conference room of the revenue board in Dhaka.

But the delegation was unsatisfied as the NBR has failed to collect the desired revenue in the first two months of the current fiscal year, its slow progress in automation process and the outline of traditional revenue collection, sources said.

The revenue board, however, assured the IMF team that they will be able to meet the conditions.

NBR sources said the IMF had suggested reducing tax exemptions, rate of import duty gradually and increasing the tax net in the 2023-24 fiscal year through budgetary measures.

But the revenue board has failed to implement the conditions due to economic reality of the country.

But the lending agency has also expressed concern over the slow pace of automation of income tax, VAT and customs at the meetings.

The IMF delegation will also meet the NBR Chairman Abu Hena Md Rahmatul Muneem on October 9 and after the meeting, they want to sit with the responsible officials of the three wings of the revenue board again.

The IMF had proposed to increase the tax-GDP ratio to 0.5 per cent in the current fiscal year (2023-24) and 0.5 per cent and 0.7 per cent in the next two years.

In order to increase the tax-GDP ratio by 1.7 per cent in these three financial years, NBR will have to collect additional revenue of Tk 2.34 lakh crore, which is a huge challenge for the organisation.

Officials of the income tax wing of the NBR said that their growth in the last five fiscal years is 14.11 per cent.

If this rate is maintained, Tk1.32 lakh crores will be collected normally.

Apart from this, the remaining Tk5,500 crore will be collected by increasing the rate of land registration, tourist tax, tobacco tax, environmental surcharge and other taxes.

At the meeting, the IMF team wanted to know how the same amount will be collected even after reducing the tax rate of land registration fee and carbonated beverages.

The tax officials have managed to satisfy them in this regard, the sources said.

At the meeting, officials of the VAT wing informed the IMF delegation, additional Tk 20,400 crore will be collected in four ways.

Such as Tk 12,400 to 13,500 crore through budgetary and regular measures, Tk 5,500 to 6,000 crore from cigarette sector, Tk 1,500 crore through exemption and Tk 400 to 500 crore through Electronic Fiscal Device (EFD).

While, the customs wing said that the growth is 14.10 per cent in the last five fiscal years and if this rate is maintained, Tk1.13 lakh crore will be collected normally.

Apart from this, they will fulfill the target by changing the tariff rate at the import level by Tk1,200 crores and will collect Tk3,600 crore of arrears from Petrobangla.