Revenue evasion will be the key challenge to meet Tk 3.72 trillion revenue target to be set for fiscal year 2019-20. Experts, however, said the country’s leading companies, including multinational and domestic ones are involved in the culture of tax evasion. As a result, the government is being deprived from earning huge amount of revenue.
In the new budget, the government wants to focus special attention on the election manifesto and balanced distribution of income, expenditure and economic growth. Following the government’s development vision, the finance minister is going to set a target of Tk 3.72 trillion revenue earning which will be a big achievement if attained.
For the next fiscal year 2019-20, budget size has been initially estimated at Tk 525 trillion. The estimated budget is the largest ever. In a bid to meet the big budget,the National Board of Revenue (NBR) will have to collect Tk 3.20 trillion and the non-NBR sources Tk 140 billion. The non-tax revenue (NTR) target will be around Tk 380 billion.
Khondokar Ibrahim Khaled, Former Deputy Governor of Bangladesh Bank said every year the government has to face a number of challenges to collecttargeted revenue.He said there is an increasing trend of revenue evasion in big companies and as a result the government is not getting the revenue they need.
The veteran banker said that in recent times the NBR has identified a number of companies that are involved in VAT evasion. There are sectors like mobile companies, government institutions, private sector, bank, insurance, cement etc., where the practice is prevalent. He said the government will have to take tough action against VAT evasion. The government also takes initiatives to strengthen the audit process in search of fraud.
The bulk of VAT and tax payers will have to scrutinize the submitted documents in the VAT office, the documents maintained in the organization, the financial statements declared for the shareholders or the details provided by the bank and other institutions, he added. To earn Tk 3.72 trillion the NBR has taken a number of new initiatives including increasing the additional targets and raise the scope of the audit to reduce tax evasion.
The NBR will also go for annual report of the institutions which are primarily under the supervision of the big taxpayers unit (LTU). The companies which pay VAT more than Tk 50 million per year will have to pay VAT in LTU. Selim Raihan, Professor of Department of Economics of Dhaka University said “We have observed every year the government could not fulfil revenue earning target due to structural problem”. He said to achieve the big revenue earning target the VAT law will have to be properly implemented.