Bangladesh has had a long-standing issue when it comes to revenue collection
It is good to see that the government has introduced the Electronic Tax Deducted at Source (e-TDS) system, through which the amount of collected source tax is expected to increase up to 85%. Bangladesh has had a long-standing issue when it comes to revenue collection, and it is good to see that the government is finally taking steps to solve this problem.
According to the latest NBR figures, in just two months of the current financial year (July-August), the revenue shortfall was Tk5,210 crore. This does not bode well for the government, as it has a huge target of collecting Tk3,30,000 crore for the current fiscal year (2021-22).
Last year, the target was the same as this year’s at the beginning, only to be revised to Tk30,100 crore later on. But unfortunately, even this was unachievable, and the government ended up collecting Tk2,60,000 crore, way behind of its set target.
But with the introduction of the e-TDS, this trend stands to be reversed. Electronic filing systems -- and digitization of services as a whole -- are good in general, as they remove the large number or red tape and bureaucratic hassles from the system.
But they become almost indispensable when considering the efficiency and transparency they would bring to the system. Both of these things have been missing from our revenue collection systems forever. As result, many have been deterred from paying their taxes.
Moving forward, the authorities need to make sure that the system indeed works, and is free of glitches and bugs. Otherwise of course it could end up complicating matters and creating problems instead of solving them. When it comes to going digital, we have seen half-measures in the past. Let us do this one right.