Finance minister goes tough on revenue collection

Finance Minister AHM Mustafa Kamal is upset with the National Board of Revenue (NBR). He instructed board officials to concentrate on revenue collection instead of making excuses for income fall.         

"Our revenue generation is too poor when compared to the growth in gross domestic product. Although the size of the taxable population is 4 crore, only 20 to 22 lakh income tax returns are submitted," said Kamal. He held the NBR responsible for the failure. 

"Businessmen spend a lot of money in shopping abroad. But they do not pay tax. You should not spare them," the minister told a meeting with revenue official in Dhaka on Sunday.

Chaired by NBR Chairman Mosharraf Hossain Bhuiyan, the meeting was attended by divisional and field level officials of the board.  

Revenue collection in the first two months of the present fiscal year rose 2 percent against the 17 percent targeted growth. This is a record low in comparison to that in any previous fiscal year. In the 2018-19 fiscal year, the NBR fell short Tk55,000 crore against the target.  

The revenue board officials had explained the shortfall earlier, but Finance Minister Mustafa Kamal only expressed annoyance and disappointment.          

Chattogram Customs Commissioner Fakhrul Alam said negative growth in the first two months of the current fiscal year slowed down revenue collection.     

He said, "The monsoon and the Eid festival hindered revenue collection from the beginning of the fiscal year. Moreover, there was a spike in the import of low customs duty and exempted goods. Despite the import of a huge amount of parts, adequate revenue could not be collected because those parts were for the ongoing mega-projects." 

He added, "Import dropped as automobile manufacturing got exemption. Import VAT waivers on liquefied natural gas, liquefied petroleum gas, ITC goods and mega-projects slashed several crores from revenue collection."    
VAT Division Member of the NBR Md Jamal Hossain said, "The growth rate in the VAT sector was 1.02 percent in the first two months of the current fiscal year. Apart from VAT waiver, restructuration of collection in tobacco cut revenue from the sector. Cement and automobile sectors also failed to supply the desired amount."         

Income TAX member of the NBR Kalipada Halder said, "Informal economic activity is the main contributor to gross domestic product (GDP). Agriculture, government projects, power and energy, fisheries and ICT sectors contribute the most to the GDP. These sectors are exempted from tax."           

The finance minister hit back by saying, "I do not want your explanations, I want revenue. The government spends after setting the revenue collection target. A shortfall of Tk55,000 crore hindered development last year." 
"I do not want this again. The target must be met without excuse. Besides, the shortfall of the last fiscal year must be collected," added Kamal.               

The minister said that revenue officials should become more active, and added, "We need to change our avoiding and skipping attitudes. We have to go everywhere and set up upzila level revenue offices for tax collection."      
AHM Mustafa Kamal said businessmen have introduced the exemption culture because they frequently seek VAT waivers.  

"We need to stop this. There will be no exemption outside the budget. If any issue arises, exemption will be considered after getting a recommendation from the prime minister." 

The minister pointed out that the power sector gets the highest exemption, yet many countries that have a poorer electricity sector than Bangladesh do not allow such massive waivers. 

Kamal said the private sector is also enjoying enormous waivers which should be reconsidered.    

NBR Chairman Mosharraf Hossain Bhuiyan claimed that the NBR is more active now when compared to that in any period in the past. 

"We have launched massive survey which will add up 12 lakh new taxpayers. Hopefully we will get 30 lakh income tax returns by the end of the year.

"We are recruiting people to solve our manpower crisis. Moreover, modernisation is replacing the manual collection systems. We are confident about fulfilling the annual target," Mosharraf Hossain added.        

The revenue target for the National Board of Revenue for the 2019-20 fiscal year has been set at Tk3,25,600 crore. The target is 17 percent higher than in the previous fiscal year. The revenue board collected Tk29,620 crore in the first two months of the current fiscal year with a growth rate of 3.36 percent.