Bangladesh News

The next fiscal budget may set a target of Tk 70,200 crore as revenue collection, which will be 23 percent higher compared to the revenue income target of the current fiscal year.

But despite the huge revenue target the government will have to depend on loans from banking sector to meet deficit of the planned Tk 100,800 crore budget in coming fiscal, sources said.

The original budget of the current fiscal year set 16 percent revenue growth compared to the revised budget of the preceding year. The current fiscal budget sets a target to collect Tk 57,300 crore revenue.

Preliminary estimate shows that of the Tk 70,200 crore revenue target, Tk 54,700 crore is NBR tax and the rest non-NBR tax and non-tax revenue.

Sources in the National Board of Revenue (NBR) said it is going to set a target to collect Tk 54,700 crore tax in next fiscal, which is 25 percent higher than the current fiscal year.

The current fiscal budget sets a growth target of 17 percent or Tk 43,850 crore in case of NBR compared to the previous year collection.

The first nine-month data of the current fiscal shows that there was 23 percent growth in NBR tax collection though the growth target was 17 percent. Growth in income tax collection was 35.6 percent compared to previous year’s first nine-month scenario.

In case of VAT, the growth was 22.31 percent and supplementary duties and other taxes growth was 31.47 percent.

However, customs duty growth is only 7.66 percent in the current fiscal as per data of the first nine months.

NBR sources said the next budget would focus on VAT and income tax for achieving the increased revenue target.

“We are planning to set an increased revenue collection in the next fiscal year after a satisfactory revenue collection in the current fiscal,” said an official of the NBR.

He said usually the revised budget downsizes the revenue target due to poor collection, but this year is showing a very bright picture.

The next fiscal will also expand the number of taxpayers for achieving the increased revenue target. “We will hunt new taxpayers at district and upazila levels after surveys on potential taxpayers,” said the official.

On VAT, he said areas of VAT will be expanded in the next fiscal and there would be a massive reforms in the system.

He said the government will make it compulsory to use electric cash register in big and medium sized shops at city corporation and district levels.

“Electric cash register will help check dodging VAT,” the official said, adding that shop owners usually dodge huge amount of VAT though the consumers pay in buying products or services.

The next year budget is likely to increase the target of non-tax revenue collection to Tk 13,250 crore which is 16 percent higher than the last year’s.

The initial estimate shows that the next budget may face around Tk 30,000 crore deficit and the government’s plans are to take about Tk 14,000 crore loan from the banking sources, Tk 13,000 crore [about $2 billion] in foreign loans, and the rest would be met by savings instrument.

The current fiscal had a target to borrow Tk 7,253 crore from the banking sector to meet the deficit budget, but the total amount of bank borrowing may increase by the end of the fiscal, sources said.

Increased subsidies in different sectors like in food, petroleum products and fertiliser, as well as decrease in sale of National Savings Schemes are reasons for increased bank borrowing in the current fiscal, the sources added.

Finance ministry sources said the Resource Committee headed by the finance adviser will meet by mid-May to discuss the next fiscal year budget. The budget is likely to be announced in the first week of June.