Govt to incur Tk 50 tr revenue loss by 2041

If comprehensive reform avoids

Farhad Chowdhury: Bangladesh’s economic stability is currently under threat due to declining tax revenue as a percentage of government expenditure, rising debt burden and widening fiscal deficit. If certain exemptions are phased out, an additional revenue of Tk 60 thousand crore is possible in the next four years.
At the same time, if reforms in the financial sector can be implemented in the medium term, additional revenue of Tk 49 lakh crore will be generated by 2041. And if comprehensive reforms are not implemented at this time, the government will suffer a revenue loss of Tk 50 lakh crore. In a seminar held in a hotel in the capital recently, the executive director of the organization Dr. Ahsan H. Mansoor.
The Executive Director of PRI said increasing tax revenue is essential to stabilize the fiscal situation in the short term and invest in long term development.
Along with planning and implementation of reform measures, it will be possible to collect additional revenue of Tk 60 thousand crore in four years if certain tax exemptions are phased out.
However, if comprehensive reforms are not implemented, there will be a revenue loss of around Tk 50 trillion in the fiscal year ending 2041.
State Minister for Finance Wasika Ayesha Khan said there is no alternative to automation to increase revenue. Currently everyone can submit returns online. Since the informal sector of Bangladesh is very large, tax collection from this sector is important. In this case, the private sector can help us. He said, besides discussing the money market, private and public debt, there is a need to discuss more about the capital market. Everyone needs to work on how to bring more and better companies to the market. Then the pressure on the money market will reduce. It is important to increase the capital market, equity market and bond market.
The Minister of State for Finance said that the current government is working tirelessly to build Smart Bangladesh after the successful implementation of Digital Bangladesh under the transformative leadership of Prime Minister Sheikh Hasina. The country is now getting returns from the mega projects that have been implemented in the last 15 years under his able management. Due to IBUS management efficiency of budget implementation has increased. Earlier, even though the budget was passed, the first quarter of the financial year would have passed before the implementation of the budget began. At present, the offices are using the budget from July 1. The finance minister assured that the suggestions that emerged from today’s discussion program will be considered very seriously by the finance ministry.
As noted in the original article, Bangladesh’s economic stability is currently at risk due to declining tax revenues as a percentage of government spending, rising debt burdens, and growing fiscal deficits. The solution to this problem will require an increase in revenue. Because over time, the pressure on human resources and social security costs will increase, including interest payments, rising wages, subsidy and pension payments. IMF support is helping Bangladesh recover its financial situation, but without increasing revenue, Bangladesh’s debt servicing capacity will not improve.
It also said that a separate tax policy department should be established in the Ministry of Finance as part of the mid-term fiscal reforms and wealth tax policy should be developed along with VAT reform, modernization of tax administration technology. At the same time, dependence on trade taxes will be reduced over time.
National Board of Revenue (NBR) Chairman Abu Hena Rahmatul Munim said, everyone enthusiastically says that the tax-GDP ratio in the country is disappointing; But he doesn’t see it that way. Comparing tax-GDP with Somalia-Congo is not fair. If you compare with those countries, you have to compare with all criteria. Importantly, those with higher tax-to-GDP ratios need to look at the sources of revenue. For example, Maldives has a higher tax-GDP ratio. The main source of revenue there is the tourism sector. But we do not have such a source. He said, I think taking more debt is a good thing. The more borrowing, the greater the economic activity.