Revenue target revised down

The government has revised down the revenue target for the current fiscal year by 8.09% to Tk125,000 crore due to a collection shortfall in the first seven months that went through political volatility ahead of the national election held on January 5.

The target was revised from Tk136,090 crore as set out at the budget for the fiscal 2013-14.

NBR would also reduce the tax rate for corporate sectors gradually and the process would begin from FY2014-15.

“NBR has witnessed a huge shortfall in the revenue collection in the last seven months due to the volatile political situation. The business as well as imports and exports remained almost halt for over three months and business has failed to pay taxes,” NBR Chairman Golam Hussain told a press conference at the NBR headquarters in Dhaka yesterday, announcing the revised revenue target.

He was expecting the new target could be achieved with three more months at hand as the current economic situation now returned to stability.

The revenue collection faced a shortfall of around Tk10,000 crore in the first seven months of the current fiscal year, according to NBR data.

Golam said NBR has also decided to reduce the corporate tax gradually and the process will begin from fiscal year 2014-15 in view of the practice of other countries where the corporate tax rate is lower than the income tax.

“With the reduction of tax rate, corporate business would pay more taxes and it will work towards reducing tax evasion,” he said, without specifying the rates to be levied from the beginning of next fiscal year.

NBR would increase the taxes on tobacco products including cigarette, bidi, jarda etc. from the FY2014-15 budget.

The NBR chairman said the revenue authorities will prepare a list of jarda factories in the country and bring them under tax net.

The revenue body is working on amending the Income Tax and Customs laws while the new VAT act will be effective from July 1, 2015.

“The draft of amendment to the laws has been uploaded at the NBR website seeking opinions from the stakeholders, but received fewer responses,” said the chairman.

About the VAT act, he said the VAT act has been amended and the automation of the wing is going on with a US$57m fund from the World Bank under a project, which is the largest project of NBR. Primarily, the fund was $35m, but it was revised up for proper implementation.

The act will replace the Value Added Tax act 1991. “With the new act, supplementary duty will be imposed on 147 products considered harmful for health and environment,” the chairman added.

The NBR chairman said the revenue body has taken a five-year strategic plan for ensuring proper revenue collection. “We will discuss the plan and issues with big chambers and associations, stakeholders and, economic research and analysis organisations to make an effective plan,” he said.

In response to a question, Golam said there are ways to scrutinise the wealth of lawmakers under the income tax ordinance and NBR is working on it. However, the chairman denied giving further info on the issue.