Despite a robust growth of 12.63 percent, the revenue collection fell short of target by Tk 5,519 crore in the first three months (July-September) of the fiscal year 2022-23. The target of revenue collection was set at Tk 71,256 crore for the July-September period of the current fiscal year, but Tk 65,737 crore was collected. During the same period of the last fiscal year (2021-22), the revenue board collected Tk 58,368 crore, according to the data available with the National Board of Revenue (NBR).
The government should take prudent steps to raise revenue collection further. Needless to mention, policymakers can raise revenues by modifying existing tax policy, enacting new taxes, and boosting economic activity.
Tax evasion has long been hindering the growth of the country’s revenue collection. More often than not NBR cannot achieve its revenue target due to tax exemption. Still our tax-to-GDP ratio is below 10 percent and Tax exemption is one of the obstacles to the non-growth of GDP ratio.
More often than not
NBR cannot achieve its
revenue target due to tax
exemption
Therefore, the government should gear up efforts to curb tax evasion in order to raise revenue collection further.
E-commerce sector can be one of the largest tax-collecting areas. But unfortunately, authorities concerned have not been able to establish any infrastructure system to collect revenue from online business sector. We need to build a highly skilled ICT wing in order to collect revenues from the ICT firms or services.
Also, the government should formulate and implement new taxation law for e-commerce which will more clearly define the parameters of the e-commerce industry.
The revenue board will need a highly skilled ICT wing aiming to collect revenues from the ICT firms or services. In order to collect revenue from the ICT service based business firms NBR has to bring some necessary changes in its existing VAT rules.
NBR has to identify the challenges and barriers in the area. As the revenue authority has no infrastructure in place to collect revenue from this area, they must build necessary infrastructure to collect revenues from e-commerce sector.