TDS Desk:
The revenue authorities are planning to collect nearly Tk 10 billion in extra by phasing out tax exemptions from different sectors in the upcoming fiscal year 2024-25.
In particular, some information technology services may lose the tax exemption privilege, while the metro rail may come under the tax net.
The National Board of Revenue (NBR) has briefed the International Monetary Fund (IMF) in this regard in a recent meeting in Dhaka on Sunday. The move came against the backdrop that there is an obligation to collect an additional tax, other than the regular growth, that is equal to 0.5 per cent of the country’s gross domestic product (GDP). The government must meet the tax collection obligation as per conditions set under the $4.7 billion IMF loan.
A whopping Tk 130 billion — approximately 85 per cent of the additional target — is expected to be achieved through stricter tax enforcement and compliance measures. According to the NBR, the IMF mandated an additional tax collection of Tk 153 billion in the upcoming fiscal year. The revenue board prepared a list of potential sectors that may yield additional taxes and presented it before the visiting IMF delegation.
Ahsan H Mansur, the executive director of Policy Research Institute (PRI), suggested that the NBR be more ambitious for the next fiscal year.
Arguing in favour of his suggestion, he said the tax collection will be slightly higher this fiscal year due to depreciation of taka and excess price of dollars, but the situation may not remain the same next year.
“Beyond the regular growth, the NBR should plan to collect Tk 200 to 250 billion in extra. It is possible to raise the additional amount by reducing tax exemptions and imposing taxes on some sectors,” he explained.
Tk 153b extra income from 10 sectors:
According to the NBR, the additional tax of Tk 153 billion will be collected from 10 sectors, while a whopping Tk 130 billion — approximately 85 per cent of the additional target — is expected to be achieved through stricter tax enforcement and compliance measures.
A proposal has already been submitted to the public administration ministry for new structures and logistic support for the tax administration. Once it is okayed, the tax administration will get additional manpower. Also, there is a proposal to procure 400 more vehicles for the tax authorities.
The revenue board estimated an additional income of Tk 10 billion by removal of tax exemptions, though the IMF suggested phasing out more exemptions and a healthier collection.
However, the income tax officials said it will not be realistic to go for a large-scale cancellation of tax exemptions right now. Still, some sectors under the information technology services may see their tax-exemption facility removed in the next fiscal year.
The authorities also anticipate generating Tk 2.5 billion in revenue through enhanced tax compliance systems, Tk 2 billion from new taxpayers, and Tk 500 million through system development within and outside the NBR.
Besides, Tk 2 billion are expected