Revenue deficit defaulting bank loans and worsening poverty situation due to COVID-19 are causing some problems in the country’s economy.
According to a budgetary document, revenue deficit and increasing unrealised loans in banking sector are hurtimg the economy.
It also stated that poverty situation is also a matter of future concern .
The target of revenue collection for the running fiscal has been set at Tk 3300.78 billion.
VAT wing will contribute the lion share with Tk 1,277.45 billion and target for Income Tax and Tax on Profit has been set at Tk 1,049.52 billioin.
The revenue collection from import duty will be Tk 379.07 billion, Tk 544.65 billion from Supplementary Duty, Tk 0.56 billion from export duty, Tk 38.25 billion from Excise Duty while Tk 10.50 billion from other taxes and duties.
In the last fiscal (2020-21) the revised revenue target was Tk 3,010 bilion while it was set Tk 3,300 billion in the main budget.
But the NBR could not attain the revised target mainly due to the ongoing pandemic that forced the government to impose various types of lockdown that hampered the economy a lot.
The collection was Tk 259,9 billion although the growth was 19 percent.
According to data, the tax to GDP ratio of the country has been 9.9 percent on an average since 2015-2019, while it is 19.8 percent for India, 23.9 per cent for Nepal, 14.7 per cent for Pakistan, 13.5 per cent for Sri Lanka.
The ratio is 25.6 per cent for developing countries and 35.9 per cent for developed countries, according to the data.
The tax-to-GDP ratio is a ratio of a nation's tax revenue relative to its gross domestic product, the value of goods and services produced in a country during a certain period. The ratio is also a marker of how well the government controls a country's economic resources.
The document mentioned that due to the increasing revenue deficit it is becoming tougher day by day for very necessary public expenditure financing in various sectors like infrastructure, health, education, water resources and social safety net.
It also said that in the banking sector especially in the public banks high rate of unrealised loans is creating pressure on eonomical situation of damaged banks and causing hurdles to collect deposit.
On January 25, 2021 Finance Minister AHM Mustafa Kamal in Parliament said that there are more that 300,000 loan defaulters in various banks and financial institutions across Bangladesh.
As of October 2020, there were 334,982 loan defaulters across the country.
However, the amount of non-performing loans (NPLs) has gone down by Tk 177.37 billion.
As of September 2020, the amount outstanding loans stand at Tk 944.4047 billion, per Bangladesh Bank data, the minister mentioned.
Due to the prevalence of the COVID-19 pandemic, the official document said, deferral facility has been provided for loan classification for a period of one year from January 1, 2020 to December 31, 2020.
To facilitate the repayment of outstanding loan installments, from January 2021, the borrowers have been given an opportunity to increase the term of the existing unclassified term loan account by a maximum of 50 per cent.
As a result of these initiatives, classified loans have declined compared to that of the previous year.
The budgetary document also said that Bangladesh has achieved significant progress in reducing poverty to 20.5 per cent by 2019.
“COVID-19 pandemic made slight obstacle in attaining this achievement,” it said.