Govt eyes Tk 13.25tn revenue in next 3yrs

Anisul Islam Noor

13 June, 2021 12:00 AM printer

The ministry of finance is working to set a medium-term revenue target for NBR to increase tax revenue growth from 10.7 per cent to 14.6 per cent of GDP by the next three fiscal years.

According to the plan, the government expects to collect Tk 13.25 trillion in revenue in the next three financial years where the NBR’s portion will be Tk 11.26 trillion, sources said.

The ministry will give a guideline to the National Board of Revenue (NBR) to implement the plan and boost revenue income from internal resources, said Nazma Mobarek, an Additional Secretary of the ministry.

She said the revenue income from domestic sources has to be increased to maintain the government’s expenditure, accelerate development activities as well as providing better services to the people.

Many individuals have remained out of tax-net though they have the taxable income and all of them have to be brought under tax-net by strengthening the capability of tax officials, she added.

SANEM’s executive director Professor Selim Raihan termed the tax revenue target for the medium term as ambitious.

 “The proposed budget says for raising the tax-to-GDP ratio to 11.6 per cent in the next financial year. But we know this ratio is 8.3 this year. In that case, it will have to be increased to over 11 per cent in one year,” he explained.

To achieve this target in FY 2021-22, it is necessary to increase revenue collection at 21 per cent (average) higher rate than the actual collection in FY 2019-20. Once the economy recovers from the Covid-19 pandemic and the NBR's reform programs are fully implemented, revenue collection is expected to intensify in the medium term.

In the medium-term revenue target, it has been said that the target for revenue collection in the next 2021-22 fiscal year has been set at Tk 3.89 trillion. Of this, NBR will have to earn Tk 3.30 trillion. Similarly, the target for overall revenue collection in FY 2022-23 has been set at Tk 4.36 trillion. Of this, NBR’s target is Tk 3.61 trillion. In the 2023-24 fiscal year, the revenue collection target has been set at Tk 4.99 trillion where the NBR’s target is Tk 4.25 trillion.

 “The medium-term revenue forecast can not be achieved unless NBR is modernized, VAT collection is completely digitized and capacity of root level revenue officials is enhanced,” said Dr. MA Razzaque, Research Director of Policy Research Institute (PRI). He also said over the last five fiscal years, NBR could not achieve its revenue collection target despite the revised targets.

The revenue collection target for the fiscal year 2019-20 was set at Tk3.66 trillion. Later it was revised and brought down to Tk 3.46 trillion. However, the total revenue collection stood at 2.85 trillion. Similarly, in the fiscal year 2020-21, the revenue collection target was set at Tk 3.78 trillion, but later it was revised down to Tk 3.51 trillion. This target would not be achieved as the NBR collected Tk 1.97 trillion till April 2021.