National Board of Revenue Chairman Mosharraf Hossain Bhuiyan on Thursday said setting of a big budget is not irrational though the government fails to implement it almost every year through meeting revenue targets or executing an annual development program (ADP). “The revenue collecting authorities and ADP implementers remain in a proactive mood having a higher target,” he said, adding that he thought it was a good policy.
The NBR Chairman said these at a round-table discussion on the national budget for the fiscal year 2019-2020. Referring to the last year’s revenue collection, the NBR chief said though they could not achieve the fiscal target they could ensure 40 percent year-on-year rise, which is a rare achievement in NBR’s history.
Referring to the prevalence of corruption in NBR offices, Mosharraf Hossain told that it could not yet entirely be eradicated. “Sometimes it falls and sometimes goes up. But overall corruption scenario is almost the same when compared to the previous time,” he said, adding that one is motivated by other corrupts.
“I am trying my best to reduce corruption through making my senior officials understand. But it is difficult to control the root level officials from the hierarchy,” he said. The NBR Chairman, however, expressed his hope that corruption will be reduced gradually. The NBR chief also said that they were trying to expand the tax net across the country.
He said Finance minister AHM Mustafa Kamal had assured him that NBR offices would be expanded to the district level within 6 months, soaring the overall revenue collection. “The minister asked me to submit a proposal with this regard and I have already prepared the proposal and going to submit it within 15 days,” he said. He, however, told that the revenue collection would be increased in a great extent if they got the offices.
“Besides, we conducted a survey for widening tax-net and have a proposal to increase NBR’s manpower which will also gear up the revenue generation,” he added. On the corporate tax issue, NBR Chairman said cutting down the tax was a complex sum as a little reduction might create a huge revenue shortfall. Mosharraf said avoidance of tax payment is on the rise in the country, falling the government’s revenue earning.
Urging the ICAB to conduct proper audits, NBR chief said some auditors make financial reports in one way for multinational companies and another way for local companies. “You are not giving true statements in case of local companies. So we are not getting actual scenario of these companies, which helps them to evade taxes,” he said addressing the chartered accountants.
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On the revenue collection issue, the NBR chairman said there were a lot of opportunities to increase direct taxes through automation and increasing manpower in the NBR’s organogram. ICAB recommended NBR uplifting the tax net as the country requires a huge amount of revenue to graduate the country to middle-income status. ICAB president AF Nesaruddin while addressing the meeting told that it was currently a big challenge for the government to increase the number of taxpayers on the way to be a developing one as only 1.25 percent of the country’s people pay taxes regularly.
“The country maintains the poorest Tax-GDP ratio in South Asia but the scenario could develop if the revenue authority expands its tax-net to the rural areas like district and Upazila level because many tax eligible people still remained out of net these areas,” he said.
“The scope of tax evasion is fewer in digital means, so, it is the demand of time to reform the tax unit through incorporating digital technologies, immensely upgrading the infrastructural capacity of NBR,” he added. He also said despite having lakhs of VAT-registered entities many of them did not obtain online registration where NBR would focus as the government are losing a huge amount of revenue this way.
“Besides, many entities did not submit the VAT revenue to the government treasury after collecting it from consumers which would be barred to ensure tax compliance and increase revenue collection,” he further said.
“A country could not achieve the ultimate development if it does not adopt sustainable development programs keeping provisions for safer environmental goals and social securities. So the authorities, in connection with this, should take actions for achieving sustainable development,” he adjoined.
