Published in New Age on Thursday 4 May 2017
Govt sets 35pc higher revenue target for NBR for next budget
The government has set an ambitious revenue collection target at Tk 2,48,190 crore for the National Board of Revenue for next fiscal year 2017-18.
The target for the new fiscal year is more than 34 per cent or Tk 63,190 crore higher than the revised target of Tk 1,85,000 crore set for the current FY 2016-17.
Budget monitoring and resource committee of the finance ministry at a meeting held on April 16 cut the revenue collection target by around 10 per cent or Tk 18,152 crore following slower than expected growth in revenue earnings by the NBR.
At the meeting, the committee also fixed the revenue collection target for the next fiscal year.
Revenue earnings grew by 19.59 per cent in July-February period of the current fiscal year against the growth target of around 31 per cent over actual collection of Tk 1,55,518.72 crore in previous FY 2015-16.
In July-February, taxmen managed to collect Tk 1,09,267 crore, according to the NBR data.
Finance ministry has asked the NBR to distribute the target among its three wings—income tax, value-added tax and customs duty and inform the ministry by Sunday.
Officials and economists said that the revised target was achievable if the revenue board could maintain the momentum.
But collection target for the next fiscal year with 34 per cent growth is highly ambitious considering the records in previous years and the current pace of economic activities, they said.
Revenue generation on an average grew by only 14.43 per cent in last five years.
They said that the government might have thought that new VAT law which is scheduled to come into force from July 1 this year would be helpful to mobilise significant amount of domestic resources though there was no specific projection on how much additional amount will come from implementation of the law.
Centre for Policy Dialogue research fellow Towfiqul Islam Khan told New Age that the downward revision of the target for the current fiscal year was expected as the original target was ambitious and unrealistic.
The target for next fiscal year is also ambitious and heavily banks on the ongoing reforms initiatives, particularly on implementation of the new VAT law, he said.
But it will be important for the government to clearly say about how the additional revenue will come and from which sources, he said.
Finance minister should devise a strategy on it and include this in his budget speech, he said.
A high official of the NBR said that the overall economic activities in the country and previous records in revenue mobilisation did not support setting up such an ambitious target.
Though the revenue board every year tries hard to achieve the target, it is not possible as economy does not grow so high to support the target, he said.
But the government, like always, fixes the target in the same manner and then slashes at the last moment, he said.
The next budget obviously will also face same reality, he observed.