‘We feel that attaining the increased revenue target for FY19 will continue to be a major challenge even though the number of taxpayers has increased’
Revenue targets included in the government’s proposed budget for FY19 are “virtually impossible to attain”, leading experts said on Thursday.
Researchers and stockholders issued the stark warning at a “Budget 2018-2019: Views of the Business Community” roundtable organized in Motijheel, Dhaka, by the Metropolitan Chamber of Commerce and Industry (MCCI) in collaboration with the Policy Research Institute (PRI).
“We feel that attaining the increased revenue target for FY19 will continue to be a major challenge even though the number of taxpayers has increased,” MCCI President Nihad Kabir, who presided over the discussion, said.
“In order to achieve the revenue target, the MCCI strongly suggests that tax compliant enterprises not be excessively burdened. Instead, new avenues of tax collection should be identified and pursued.”
Although extra revenue could be generated from discretionary measures - such as a tax on cigarettes, increasing VAT withholding to 5% at the import stage, and increasing income tax withholding on both direct and indirect taxes on RMG exports - experts said these are not enough to even get close to the revenue target.
To help plug the gap, Nihad Kabir called on the government to set taxpayer number targets for tax officials, and reward them for enrolling new tax payers.
“However, the NBR should not reward its officials for the collection of large sums of taxes from individual taxpayers, as this may encourage illegal practices,” she said.
The MCCI chief also pointed to a number of other priorities for the MCCI, including policy reforms, simplification of the taxation system, and business friendly policies such as incentives and reduction of taxes.