It is encouraging to note that the National Board of Revenue (NBR) has achieved big success with 92 per cent VAT collection in 2022-23 fiscal year. Reportedly, the Value Added Tax (VAT) Division of the NBR earned Tk1.25 lakh crore with 17 percent growth in FY23, which was Tk1.8 lakh crore in FY22. It is worth mentioning that the Finance Division, a wing of the Ministry of Finance, has termed this achievement as 'exceptional' in it’s annual performance report.
Tax evasion has long been hindering the growth of the country’s revenue collection. More often than not NBR cannot achieve its revenue target due to tax exemption.
Still our tax-to-GDP ratio is below 10 percent and Tax exemption is one of the obstacles to the non-growth of GDP ratio. Therefore, the government should gear up efforts to curb tax evasion in order to raise revenue collection further.
The government should take prudent steps to raise revenue collection further. Needless to mention, policymakers can raise revenues by modifying existing tax policy, enacting new taxes, and boosting economic activity.
Policymakers can raise
revenues by modifying
existing tax policy,
enacting new taxes,
and boosting
economic activity
E-commerce sector can be one of the largest tax-collecting areas. But unfortunately, authorities concerned have not been able to establish any infrastructure system to collect revenue from online business sector. We need to build a highly skilled ICT wing in order to collect revenues from the ICT firms or services.
The government should formulate and implement new taxation law for e-commerce which will more clearly define the parameters of the e-commerce industry.
The revenue board will need a highly skilled ICT wing aiming to collect revenues from the ICT firms or services.
In order to collect revenue from the ICT service based business firms NBR has to bring some necessary changes in its existing VAT rules.
NBR has to identify the challenges and barriers in the area. As the revenue authority has no infrastructure in place to collect revenue from this area, they must build necessary infrastructure to collect revenues from e-commerce sector.
