Al Amin :
The government has set an ambitious revenue collection target for the forthcoming fiscal year to meet the loan condition of the International Monetary Fund (IMF).
The hefty target has been set at a time when the country’s economic growth is facing headwinds due to rising inflation, energy shortages, import restrictions, and monetary policy tightening.
Finance Minister AHM Mustafa Kamal will announce the budget worth Tk 7.61 trillion for the fiscal year 2023-24 on Thursday, where the revenue target has been estimated at Tk 4.30 trillion. The tax collection target is 16 per cent higher than the current fiscal year.
Achieving the target, the National Board of Revenue (NBR) has initiated to increase tax net as well as tax rates. It will impose Value-Added Tax (VAT) on essential commodities like plastic and aluminum made goods, toilet tissue, pen and mobile phone.
Besides, the revenue board is going to impose additional customs duty on some food items like date and some others in line with saving dollar and preventing tax evasion. Following this, the expense of the living will increase further, experts opined.
Dr Ahsan H Mansur, Executive Director of the Policy Research Institute (PRI), told The New Nation, “Tax collection target in the budget for the upcoming fiscal year is ambitious considering the ability of the NBR. The target will not be achieved at all with the present tax administrative structure.”
“NBR always adopts easy tax collection approach to meet revenue targets. For example, by increasing the VAT on cigarettes or by increasing the VAT on products that have VAT or by increasing the tax rate on those who pay the tax,” he said.
“Naturally, the living costs go up, if the NBR imposes additional VAT on goods. But, it is not paying much attention to expanding tax net,” he added.
Plastic and aluminum made goods, kitchen towel, toilet tissue, napkin tissue and facial tissue will become costlier in the upcoming fiscal year as the NBR is going to impose additional VAT on these goods.
Besides, the imported micro woven will be pricier due to the imposition of additional 30 per cent customs duty on it.
LP gas cylinders are widely used for cooking purposes all over the country. In the budget, the import duty is likely to be imposed on steel and welding wire used in the manufacture of cylinders and VAT on these goods may increase at the manufacturing stage. As a result, the price of cylinders in the market may increase further.
Besides, the cost of building houses will be soared as import duty on clinker, the main raw material of the cement, is likely to increase to Tk 700 from the existing Tk 500 per tonne in the budget. On the other hand, price of imported tiles will be gone up as the existing subsidy facility on imported tiles used in houses is going to be withdrawn.