Strategising resource mobilization

Domestic resource mobilisation has ever remained a tough task for low-income countries but it has become even more challenging in the post-Covid global trade regime constrained by the Russo-Ukraine war. Bangladesh's tax-GDP ratio, which was lower than even the neighbouring countries, further dipped to just 8.0 per cent from 11-12 per cent in the past few years, has now become a cause for serious concern. Leading economists in this particular area, according to a report carried in this newspaper on Tuesday last, have squarely blamed the 'institutional failure of the National Board of Revenue'. In this context, the chairman of the Policy Research Institute (PRI) which along with its Study Centre on Domestic Resource Mobilisation organised a training programme, while speaking on the occasion, has observed that the failure to differentiate between tax administration and customs administration does not help the cause. While customs administration should concentrate on minimising trade tax aimed at promoting business, achieving tax dynamism is a different proposition.

Indeed, low tax-GDP ratio itself speaks volumes for the NBR's failure to bring all the eligible taxable citizens under the tax net. Add to this the siphoning off money into destinations abroad on a regular basis. Why cannot the holes be plugged? Experts have suggested reform to the NBR laws. Well, if this is overdue, fiscal discipline is also a must for the NBR to operate in a financial system marked by as much as much transparency as is possible. The way big loan defaulters are enjoying concession after concession hardly helps the cause of transparency.

True, the tax regime has become simpler compared to the past but more needs to be done in order to bring the vast number of tax dodgers ---some of whom are wilful ones and others, particularly those in villages, are inept in this matter. The NBR should have extended its reach to the upazila level in order to inspire potential taxpayers at the grassroots level to do their duty to the exchequer. Then there is a need for creating an enabling regime for submission of tax returns by all as honestly as possible. Payment of taxes lower than that is due in collusion with a dishonest section of tax collectors is also tax evasion. Resource mobilisation falters as a result.

However, there are other ways to pull resources. Different nations are falling back upon reserves of their resources in order to stay afloat in this crunch time, a few have gone broke. In this context Ghana has decided to sell off its gold reserve for repayment of loans taken from international financial institutions. Apart from revenue collection, resources can be mobilised by way of finding substitutes for the costly imported fuels such as petroleum products and gas. In case of Bangladesh, this exercise has largely been ignored at this critical juncture. Let alone exploration of offshore gas, onshore or even the abandoned wells with potential reserves have not been brought under scrutiny for immediate extraction of gas except one in Sylhet's Byanibazar which yields 8.0 million cft to the national grid daily. In the same way, high quality bituminous coal estimated to be a billion tonnes in Barapukuria, Dinajpur awaiting extraction while Bangladesh imports low quality Indonesian coal.