Bangladesh burdened by debt from loan-driven budget expansion: NBR chairman
He also pointed out that businesses are supposed to collect VAT on behalf of the government and deposit it accordingly, but this process is not functioning properly
Bangladesh has one of the lowest tax and VAT collection rates in the world, which has led the country to become debt-ridden, National Board of Revenue (NBR) Chairman Abdur Rahman Khan said today (25 February).
"For the past 52-53 years, we have been increasing the budget through loans every year," he said during a pre-budget discussion with business leaders held at the Rajshahi Chamber of Commerce and Industry.
"Paying off these loans – whether local or foreign – along with interest, has become a significant burden, which is not desirable. There is no alternative to increasing domestic revenue," he added.
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The NBR chairman said, in reality, it is not business owners, but consumers who pay value-added tax (VAT).
"Among three crore business owners in the country, only 5.5 lakh are registered for VAT, which is unacceptable. We are taking extensive measures to address this issue," he said.
"Notices will be issued to those running businesses without VAT registration. At least 70 to 80 lakh new VAT registrations need to be added," he added.
Abdur Rahman Khan also pointed out that businesses are supposed to collect VAT on behalf of the government and deposit it accordingly, but this process is not functioning properly.
"Many business owners evade VAT, forcing us to increase the budget through loans. There is no alternative but to expand the tax net," he added.
The NBR chairman said initiatives are being taken to separate tax collection and policymaking.
"NBR will only be responsible for revenue collection, while another institution will be formed to draft related laws," he said.
He added that automation of tax and VAT collection services is being accelerated. He also announced steps to expedite revenue collection at the Sultanabad-Maya River port in Rajshahi and facilitate machinery parts imports through the Sonamasjid land port.
Before the NBR chairman's speech, business leaders expressed concerns over rising commodity prices and the burden of increased VAT and taxes, stating that it is becoming difficult to sustain their businesses.
They urged the government to expand the tax net in the upcoming budget instead of increasing existing taxes, VAT, and duties.
