Although the revenue collection target has been lagging behind in the last six fiscal years, including the current one, the revenue growth in the national budget for 2020-21 has been projected to be quite high (over 40 per cent) even though the annual revenue growth is 18-20 per cent. In the middle of the year, the development budget aka ADP may be slashed, the underdevelopment budget may reduce the allocation for social security, especially road maintenance, health education, the need for a budget support fund for donor agencies with various reforms, including bank loans. Can Until the ratio of tax revenue to GDP reaches a fair level, the rationale for setting high revenue growth targets will remain. The fact remains that the expansion of the tax net without increasing the tax rate should be done to achieve the revenue target. All parties need to realize that raising the desired amount of revenue or internal resources is important not only for the inflation of government revenue, but also for ensuring social justice by balancing the distribution of resources, eliminating inequalities in individual, family, society and regional development. Tax revenue will play one of the most influential roles in building the country in the glory of self-reliance and bringing it out of the mystery of dependency. In every effort on the part of the Department of Internal Resources in managing the collective revenue and expenditure of the government, there should be an unwavering conviction of open self-confidence, co-operative attitude, simplification of procedures, gaining the confidence of the taxpayers. Everyone, regardless of policy-makers, implementers and citizens, should actively strive to take deliberate steps, not in the traditional way of working. In the next new national budget, the direction and management roadmap will be expected.
For the first time in 2008, the NBR did not have to look back for the next five years to achieve tax revenue by surpassing the circular target. In those five financial years, the overall revenue increased by almost one hundred percent. Growth in the size of the ADP, among other factors, contributed to the increase in revenue. The amount of ADP implemented in 2006-07 was only Tk 16,455 crore and in 2020-21 it exceeded Tk 205,000 crore. There is room for analysis as the implementation of the ADP in the last financial years has not generated much revenue at a rate commensurate with the abnormal growth. It has been observed that in the previous five financial years, the tax ratio excluding companies and non-companies fluctuated between 59:41 and 55:45, but this progress ratio was not observed in the next two-three financial years. Although the share of income tax in the revenue is going up from 25 to 33, it is still on its way to becoming one of the households in the income tax revenue collection family. According to the size and appearance of the economy, the position of income tax should be much higher than the import duty (immediate) and value added tax (VAT), shouldn’t it? The share of VAT in the overall revenue is still 35 percent and 33 percent. If the contribution of income tax to the macro-economy is to be considered as a pioneer, it needs to be run more vigorously, it needs to be more dynamic, we need more integrated initiatives.
It is seen that the growth rate of income tax income is still slow, mixed and depressing, while the main role of direct tax is already to be established according to the overall growth rate of the economy. The review shows that the ratio of tax to non-company has gradually increased from 80:30 to 56:42. Although corporate business has increased in the country, the growth of income tax paid by the company does not appear to have increased in the same way or at the same rate. On the other hand, apart from the companies, the taxpayers include individual taxpayers, partnership firms, associations of persons, artificial juridical persons and there is scope to strengthen their initiatives to bring them under Cornet. Although the number of individual taxpayers (according to TIN holders’ calculations) has not been properly counted and saved in the recent past, efforts have been made to accelerate the trend since the progress figures were reviewed. Only 25-30 per cent of those who have opened income tax documents are paying regular taxes, while the rest need to step up their follow-up initiatives. In addition to increasing and expanding the manpower of the Income Tax Department, there is no alternative but to make effective use of the existing manpower and structure and ensure direct tax administration-management with national responsibility. The distance between the taxpayer and the collector can be reduced as much as possible by making the process of taxation, accounting and depositing process as tax-friendly or simplified or online as it is important to monitor and monitor the timely and actual amount of income tax levied and collected. And if an atmosphere of trust is created in this way, the expansion of Cornet will continue to happen. In raising the tax-to-GDP ratio of the country to an appropriate level, it is undeniable that there is ample scope and opportunity for the direct tax payer to play a leading role in the overall revenue earning household.
For a year or two, it is not clear whether the taxpayer is really growing or not. Overall, income tax is dependent on source tax and company tax. It is growing. But that is not enough. It remains to be seen whether the actual scope of the tax will increase. Whether the number of taxpayers is increasing and whether the amount of tax is increasing at that rate. In addition, it is necessary to take maximum measures to prevent or limit tax evasion, including granting concessions and exemptions. In this case, it is also a matter of seeing whether all those who are paying corporate tax are paying the right amount. Because it is often seen in the report, so many crores of rupees of revenue evasion of such organization or company. Such a contractor, such a casinowala’s house is a mountain of money. This is not a boy’s game. There may also be questions about the capacity of the tax-collecting organization. Because there may be an indication of the lack of monitoring, effort, efficiency, honesty and responsibility of the authorities. In the last few years, the NBR has undergone a number of reforms in manpower management, manpower and structure. Capacity has increased a lot. Revenue collection has also increased. This is certainly admirable. But we have to consider whether the rate of reform and expansion has increased, whether the taxpayers are increasing at the same rate, or whether those who are being added can stay behind. Care must be taken to ensure that taxpayers are not harassed due to some limitations in the existing tax system and, in some cases, the incompetence of the tax department. It is important to increase the tax base.
The share of import duty in total tax revenue has come down from 42 per cent in FY 2006-07 to 30 per cent in FY 2013-14 and 26 per cent in 2019-20 and annual growth is sometimes 28 per cent, sometimes only 5 per cent, indicating large random and unplanned efforts. By Although there is an idea or argument that the import duty will gradually decrease due to the change in the tariff process in compliance with the rules of the WTO, the relation between the increase in the import duty on high dutyable goods and the proportional increase in customs revenue remains to be examined. The need to coordinate the tariff structure with price fluctuations, to ensure greater concentration, efficiency, transparency and proper application in tariffs including valuation remains undeniable. At the local level, the share of value-added tax revenue has increased from 33 per cent in FY 2006-07 to 39 per cent in FY 2013-14 and 45 per cent in FY 2019-20, indicating an inconsistency in income tax revenue with the overall growth of the economy. The mixed rate of annual growth of VAT income also does not meet the expectations of sustainable and upward growth of VAT income. Considering the average growth of imports (22 per cent), GDP (5-6 per cent) and inflation (8-9 per cent) and the growth of business activities at the local level, the growth of income from indirect taxes at the local level is at least 25 per cent. It seems reasonable to be more. The share of income tax in total tax revenue has increased from 25 per cent in 2006-07 to 34 per cent in 2016-17 and 36 per cent in 2019-20, which is a satisfactory progress over the previous times. There is room for this trend to accelerate. However, the annual growth rate of income tax did not go up steadily to 28 percent, 11 percent, 16 percent, 26 percent and 19 percent. The number of income tax payers is very limited, there will be initiatives to increase it. It will be easier to increase the share of total revenue if we can overcome the weakness of the organizational structure by avoiding inter-tax concessions, laundering corrupt black money without penalty, low tax rate and without explanation, by combining efficient and responsible manpower. First of all, a concerted effort is needed to take the tax-to-GDP ratio to a better level.
Dr. Mohammad Abdul Majid: Columnist, former secretary and former chairman – NBR.
Source: Bhorer Kagoj by www.bhorerkagoj.com.
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