More people would be brought under tax net which would substantially help increase volume of tax collection.
The 2019-20 fiscal budget has been prepared without putting any extra pressure on the people.
The National Board of Revenue has plans to uplift revenue collection in the upcoming 2019-20 fiscal widening the tax-net, instead of increasing the rate.
According to NBR source, the revenue authority is optimistic about increasing the revenue collection in all tax regimes – Tax, VAT, Customs, which will not put any impact on the price of the daily essentials.
The exchequer is now reviewing measures that will increase the revenue collection through the legal changes of existing rules and regulations, bringing large number of tax-eligible people under the net, they said.
The revenue authority, in connection with the collection of VAT revenue, is putting special emphasis on the internal sources, by which revenue collection will be geared up through expanding the purview of this indirect tax and it will be reflected on the budget speech of Finance Minister, an official engaged in NBR’s budget committee told Bangladesh Post.
“The NBR till now has no plan to increase the tax-free income threshold in the next fiscal because if it is done it will release a big chunk of people from the net, weakening the tax regime,” he said adding that the Prime Minister, however, will decide finally in this regard.
According to NBR sources, the Finance Minister will also put directions in his budget speech about the expansion of tax offices to upazila level to bring the wealthy people under the net.
It is scheduled that the minister will hold talks with NBR officials on Wednesday and the following day to finalise the framework of income tax for the new fiscal.
Sources said the NBR in order to ensure the tax returns of employees, and house owners may bring some changes to its existing law, that could be reflected in the next budget.
Currently, the existing tax law includes the obligatory submission of the tax returns by such people but many of them are non-compliant.
The next budget will also put directions on the administrative reforms of NBR, including introduction of UTDS system, forming of separate monitoring zone, forming of modern tax information unit, introduction of digital audit system.
Besides, directions about the easing of online tax return submission, and strengthening of Transfer Pricing Cell to avert money laundering could also be reflected on the budget speech.
NBR officials said, in the next budget, there might be some flashes in the VAT regime as the much awaited VAT and Supplementary Duty Act-2012 will be enforced through the upcoming budget.
The key foundation of the new VAT law is expansion of VAT purview. Following the stiff oppositions by the country’s business community the government is set to expand the net but not increase the VAT rates.
Prior to this, the NBR and the trade bodies were in tussle over some issues of the new VAT law, including VAT rates, tariff value, Supplementary Duty and so on.
As per the new law, the NBR will provide Electronic Fiscal Devise (EFD) to the business sales points. Initially NBR will set up 10,000 EFDs at the shops of large shopping malls in divisional cities which will directly be connected with the NBR’s VAT online server.
The exchequer will set up another 40,000 EFDs in the next phase, and NBR officials believe that the incorporation of these machines will exponentially intercept the VAT evasion, increasing the government’s revenue.
Apart from this, NBR will also adopt special move to collect the turnover tax from the listed companies in the next year. In a bold line, the budget will incorporate provisions to collect revenue by stopping the evasion, sources said.
However, the Revenue Board might uphold the tax exemptions from refrigerator, air conditioner, and motorcycle sectors to help these promising local industrial sectors grow, they said.
Besides, to keep the inflation rate under control, the government could offer VAT exemptions from the production of Palm, and Soybean oil. VAT could also be exempted from the Liquefied Petroleum Gas distribution in business level.
The finance minister in the next budget will announce the submission of VAT return on a monthly basis, NBR sources said.
Besides, the new budget will also incorporate strict provisions about the non-compliance of VAT payment, they said.