Tax-GDP ratio to increase with duty exemption cutbacks: NBR official
PM Hasina to open two-day revenue conference at the Bangabandhu International Conference Centre on Sunday
The ratio of tax revenue to the country's gross domestic product (GDP) will increase once the tax exemptions are gradually reduced, said National Board of Revenue (NBR) Member Pradyut Kumar Sarkar.
"Tax exemptions in various sectors have helped the country develop economically and this facility got us good results in the last two decades," said the NBR official at a press briefing organised on the occasion of the upcoming revenue conference on Friday.
"Our GDP is now $470 billion. The government has provided tax exemptions in many sectors, including agriculture trade. With these exemptions, the public sacrificed [their hard-earned money] for the better economic, industrial development," Pradyut Kumar Sarkar added.
The recently approved $4.7 billion International Monetary Fund (IMF) loan, which comes with the waiver of the first instalment, mandates major fiscal reforms, including raising the tax-GDP ratio.
In response to a media query on the matter, Pradyut Kumar Sarkar, said, before addressing the tax-GDP ratio, the development philosophy of a country should be taken into account.
"We wanted rapid economic development thanks to our political farsightedness," said the NBR official.
"Even if the tax-GDP ratio drops, which is one of the parameters, faster economic growth takes us towards sustainable development," he said, pointing out that there are countries in economic distress despite having very good tax-GDP ratios.
"The way automation is progressing; our tax-GDP ratio will increase automatically. We will gradually reduce tax exemptions for the sectors that have already achieved a solid footing and it will also boost revenue collection. We are on the right track," he added.
On how the NBR plans to coordinate revenue collection, policy reforms and IMF loans, Md Masud Sadiq, member (Customs - Policy) of NBR, said the IMF proposal is not conflicting with the NBR's revenue collection policy.
"Revenue reforms is a regular process, which is to some extent done every year during budget – independent of any loan deals. Besides, the IMF recommendations are in line with our objective of trade-friendly reforms," said the NBR official.
On the automation of bonds and automation reforms of the customs, he said the automation of bonds started one and a half years ago while the implementation of the Bonded Warehouse Automation Project will be completed by 2023.
"Once it is completed, the issue of monitoring will no longer be there," he said, adding, "Automation, however, is an ongoing process as new technologies are regularly developed."
PM Hasina to open revenue conference Sunday
Prime Minister Sheikh Hasina is scheduled to inaugurate a two-day revenue conference at the Bangabandhu International Conference Centre on Sunday.
The prime minister will also inaugurate the new building of the NBR on the same day, said NBR Chairman Abu Hena Md Rahmatul Muneem.
"There will be a total of three seminars on VAT, customs and income tax. In addition to seminars, there will be information booths on these issues. People will be able to know more about VAT, customs and income tax. At the same time awareness about online services will also increase," hoped the NBR chairman.