The revenue collection of National Board of Revenue (NBR) has increased by 14 per cent to Tk 2.96 lakh crore in the fiscal year ending June 30. The earning is close to the NBR’s dream target of collecting Tk 3 lakh crore in a fiscal year, thanks to the government for framing new strategies to increase the amount of revenue collection.
The increase is attributed to growth in the volume of both export and import of the country. Though the revenue generation increased by 14 per cent in FY 22, NBR missed to reach the fiscal target of Tk3.30 lakh crore. But the NBR collected revenue of Tk 36,000 crore more than the previous FY 21. Reportedly, in FY 21, the NBR collected revenue around Tk2.60 lakh crore from income tax, Value added Tax (VAT) and customs duty against the revised target of Tk 3.1 lakh crore.
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.
Policymakers can raise
revenues by modifying
policy, enacting new taxes,
and boosting economic activity
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.
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.
Also, 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.