Loading...
The Financial Express

Tax waivers erodes 8.0pc of Bangladesh's tax-GDP ratio

| Updated: September 20, 2021 11:20:43


Tax waivers erodes 8.0pc of Bangladesh's tax-GDP ratio

Tax exemptions are eroding 8.0 per cent from Bangladesh's tax-GDP ratio, but the government's revenue authority says it is necessary to spur economic growth.

Bangladesh's tax-GDP ratio is one of the lowest in the region.

The NBR chief said they were not frustrated over the ratio as the tax waivers fall within fiscal policy in the current budget with the greater goal of higher consumption by well-off middle-class people.

The country's tax-GDP ratio is currently below 9.0 per cent which could have been 17 per cent if the government refrained from offering exemption, admitted NBR chairman Abu Hena Md Rahmatul Muneem.

"We are not frustrated or concerned over the poor tax-GDP ratio of the country as our calculation before this year's national budget found that reason," the National Board of Revenue chairman said at a press briefing on the NBR premises.

Some 8.0 per cent of the total revenue collected from customs wing is being lost in the form of tax exemptions, he added.

The country's achievement on education, health, infant mortality is better than other neighbouring countries for giving tax exemption in relevant sectors.

He said fiscal policy for the current year's budget has been devised keeping in consideration increased consumption by middle-income group of people.

"To reduce import-dependency for the goods mainly consumed by middle-income group, the revenue board has offered a wide range of tax exemption to popularize 'Made in Bangladesh' slogan," he added.

Waiver for home-appliance manufacturers would help in the growth of domestic industry, he said for an instance regarding the shift in economic pivot during the corona crisis that squeezed external trade worldwide.

"We won't let other countries target our middle-class consumers (with their products)," he said.

The tax-benefit has been offered for a longer period to facilitate investors in framing their future plans, he noted.

Responding to a query, the NBR chairman said taxmen would not go for any harsh measure for people who have Taxpayer Identification Number (TIN) but did not submit tax returns in compliance with the law.

Although tax-return submission made mandatory for all TIN-holders, taxpayers have yet to get habituated to doing this, he said about the logic behind leniency.

"Not enforcement but awareness would get priority. If it does not work, later they would be brought under law," he added.

He said the government has yet to decide whether it would organize income-tax fair this year on a large scale.

In case of not holding tax fairs, the tax zones will arrange tax fair-like environment on their respective premises like in previous years.

On lottery for Electronic Fiscal Device (EFD), he said mass campaign and awareness is imperative to make it successful as people are not claiming the prizes (on account of paying value-added tax).

Although the NBR has decided to honour 100 consumers on their EFD invoices, it could hand over prizes to less than 20 persons in a month during the last eight lotteries.

NBR member of VAT wing Dr Abdul Mannan Sikder said the lottery programme is gaining momentum gradually. Daily more than 80,000 invoices through EFDMS are being generated.

"Feedback of EFDMS is encouraging and we are planning to honour some businesses with certificates of appreciation next month for using EFDMs," he said.

The NBR chairman said they are thinking about some alternatives to ensure VAT collection from retail businesses.

Director-General of NBR research and statistics wing Md Anwar Hossain gave a detailed presentation on 'Revenue Mobilization Work-plan' of the NBR at the programme.

He said revenue collection had grown 500 per cent in the last thirteen years of the present government's rule.

In FY 2008-09, the NBR collected revenue worth Tk 525.27 billion that jumped to Tk 2.59 trillion in FY 2020-21.

[email protected]

Share if you like