NBR-IMF meeting on loan condition progress likely on Friday

The National Board of Revenue (NBR) is expected to hold a meeting with a delegation of the International Monetary Fund (IMF) on Friday regarding the progress and steps taken in the budget to address the conditions imposed by the global lender for its $4.7 billion loan to Bangladesh.

Several sources related to the NBR told The Business Standard that NBR Chairman Abu Hena Md Rahmatul Muneem will be present in the meeting. However, when asked, the NBR chairman did not admit to any such meeting.

Sources said the meeting aims to address the IMF's queries on how the NBR plans to boost the capacity of the revenue sector as well as revenue collection.

According to the sources, the NBR has already prepared a presentation, gathering information from its three departments – Income Tax, Value Added Tax (VAT) and Customs – for the meeting.

A senior NBR official, on condition of anonymity, told TBS, "As per the IMF programme and time frame, most initiatives have either been implemented or are being implemented."

According to IMF conditions, the NBR has to adopt tax revenue measures to yield an additional 0.5% of GDP in the FY24 budget. For this, the IMF also set some programmes such as rationalising tax expenditure with measures to be adopted in the budget.

The NBR has taken various steps through tax rate hikes, or cut tax exemptions in the budget such as increased tax on property sales, tobacco, beverage and other sectors.

In this way, the revenue authority also withdrew some exemptions from some sectors including the mobile phone sector, polypropylene staple fibre, software, and LPG cylinder. 

Also, the customs duty exemption facility was reduced in some local manufacturing sectors. Supplementary VAT was increased in tobacco items, plastic, aluminium and sunglasses.

The NBR Chairman may highlight these issues during the meeting with IMF representatives, sources said.

The number of Business Identification holder (BIN), progress of Electronic Fiscal Device (EFD) installation, medium-term revenue strategy (MTRS), adopt tax compliance improvement plan NBR staff compliance risk management units in customs and VAT wing is the key area in which IMF would want to know.

Sources said, as of May 2023, around 4,38,000 BIN holders registered so far, and less than 10,000 EFD machines were installed up to June.

The MTRS is yet to start by this time. The NBR, however, surpassed the VAT achievement target.

Before passing the budget, a delegation of the IMF asked the NBR to know the progress made on these conditions. However, the NBR did not disclose it at that time due to budget-related confidentiality issues.