Meeting the revenue target
The government's focus on mega projects, skills development and job creation are commendable. However meeting the revenue target will be difficult according to experts, especially since the national board of revenue (NBR) now has the uphill task of collecting taxes to meet a budget that is more than a third larger than last year's. Although new taxation levied on tobacco products is a welcome move, we are not so sure how the new levy on mobile phone users that will help matters as we believe it will work contrary to creating a digital Bangladesh.
Although the wealthy may be taxed more under the new regime, it all boils down to collection. The new VAT Act has not been accepted by the business community and its implementation has been deferred till January 2017 and there is no guarantee it will be popular then too. With half the year gone, precisely how the targeted budget will be met from VAT is suspect.
It is good that budgetary allocations have increased on education and technology (+ 34.55%), social safety net programmes, etc., However, with increases in allocation, we keep coming back to revenue collection and NBR is to generate 35.8% from VAT, which will be implemented in the remaining six months of the fiscal year. An almost equal chunk is slated to come from taxation. We conclude raising the same question that revenue collection is seemingly unrealistic since NBR managed to achieve 15% revenue collection in the first nine months of the last fiscal (up to March) against a target of 30% growth. This year the body has been tasked with collecting Tk53,000 crore (a rise of 35% over last year) and precisely how that will be achieved remains a big question.