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Budget session tomorrow

Govt sets higher revenue collection target for FY20


Bangladeshpost
Published : 09 Jun 2019 09:19 PM | Updated : 05 Sep 2020 03:39 AM

The budget session for the 2019-20 fiscal of the 11th Jatiya Sangsad (JS) begins tomorrow (Tuesday) morning. The size of the national budget, due to be placed before the JS on June 13 (Thursday) is likely be about Tk 5.23 lakh crore, up 12.50 percent against the previous fiscal year, according to the finance ministry sources.

It would be the third session of the 11th parliament and the first budget of Awami League government which assumed office after a landslide victory through the December 30 national election. President Abdul Hamid on May 13 summoned the third session of the 11th parliament exercising the power bestowed upon him as per Article 72 (1) of the constitution. The first session the 11th parliament began on January 30.

Before the House goes into the session, the business advisory committee of parliament will sit in a meeting to fix the duration and businesses of the session. Finance Minister AHM Mustafa Kamal for the first time is going to place the proposed national budget for 2019-20 fiscal in the House on June 13 (Thursday), a spokesman of the parliament secretariat said.

Talking to journalists Finance Minister AHM Mustafa Kamal said that the next budget for the fiscal 2019-20 would be more people-friendly through ensuring smooth implementation of the development projects. According to the finance ministry, the budget will be for all people and the government is set to give the budget for development of all people.

The government will try to fulfill the demand of all people in the next budget, according to the finance ministry sources.The budget will give special focus on implementation of different development projects. Through implementation of the projects, Bangladesh will move forward, the Awami League government believes.

Besides, the government will provide special focus on developing skill of the country’s workforce and building institutional capacity for ensuring properly implementation of budget. On June 7, 2018, former Finance Minister AMA Muhith placed a Tk 464,573-crore budget for the 2018-19 fiscal year.

According to the Parliament Secretariat, all preparations have been completed to hold the session timely and as part of the budget session, a “Budget Information Help Desk” has been set up at the third level of the Northern-East Block of the Parliament Bhaban. Apart from the budget, some important bills may pass in the current session.

Finance Minister AHM Mustafa Kamal has already held three pre-budget meetings with economists and parliamentary standing committees, while Prime Minister Sheikh Hasina has advised him to discuss different issues of the budget with his predecessor. The revenue collection target for FY20 has been set at Tk3,77,000 crore, in order to reduce dependency on foreign aid and grants.

The budget will have some initiatives to increase foreign investment. It will also have steps to attract foreign investment to the capital market, sources said. The automation process of savings certificate sales will start from the next budget, in which money from the savings certificates will go directly to the linked bank accounts of individuals.

Complying with the ruling party's electoral pledges, the budget will include some big initiatives for the development of rural areas. The allocation to eradicate poverty in the rural areas will also be increased. GDP growth has been targeted at 8.5% in the next fiscal year, while the inflation rate target will be 5.5%, with multimodal steps to increase credit flow for production.

The National Board of Revenue (NBR) has been tasked with collecting Tk3,25,600 crore, while the non-NBR sector will collect Tk14,500 crore, and the non-tax sector Tk37,500 crore,  a reliable source in Finance Ministry said. The exchequer, as per this count will have to collect revenue with a 9.9 percent year-on-year growth, as the revenue target for the FY19 is at Tk 296,200crore.

However, the revenue target for the FY19, has already been revised to Tk 280,000 crore, and it will have to revise again as the revenue shortfall in the first nine months crossed Tk50,000 crore benchmark, the tax official believe. The revenue target for the FY20 will be around 30 percent up than that of the actual collection in the FY19, they said.

According to sources, the government is preparing the next budget in line with the goals of 7th five-year plan where the Tax-GDP ratio will be upgraded to 15.3 percent. The ministry source said, the entire revenue target for the FY20 will be at Tk 377,810 crore. According to the estimated figure, the total tax revenue target will be 11.8 percent of GDP while the NBR revenue will be 11.3 percent simultaneously.

The non-NBR tax revenue figure for the upcoming fiscal will be at Tk 14,500 crore. NBR sources said the income tax will be the highest revenue collecting regime in the new fiscal as the government earlier had taken a plan to increase the income tax revenue to 50 percent of the entire revenue by 2021.

The NBR has already taken several moves for the expansion of the net of this direct tax, including enhancing its infrastructural capacity. The VAT and Supplementary Duty Act-2012 will be enforced from the July next and the government for ensuring revenue growth is set to expand the purview of VAT instead of increasing its rates, which will be reflected on the Finance Minister’s budget speech, sources said.

Finance Minister earlier told several times that the government would boost the revenue collection through the expansion of net, not pressurizing the people. “The people those who are tax-eligible but do not pay it will be brought under the net,” he added. According to sources in Finance Ministry, the outlay of budget for the FY20 will be at Tk 523,190 crore where the total revenue target will be Tk 377,810 crore.

The entire revenue target for the FY19 is at Tk 339,280, and as per this count, the revenue target will be up Tk 38,530 crore in the next fiscal. The tax revenue for the ongoing fiscal is Tk 305,930 crore while the target for NBR is Tk 296,200 crore. Sources said the government is now optimistic to increasing the revenue collection on the back of the new VAT and Supplementary Duty Act, as the new law could exponentially avert the evasion. According to the new law, the VAT regime will totally be an automated one, ensuring the compliance of both tax officials and the businesses. Apart from this, the government is also set to introduce the customs law in the next year that could also help increase the revenue collection.