IMF team to discuss revenue situation with NBR today

An International Monetary Fund (IMF) mission is scheduled to meet the senior officials of the National Board of Revenue (NBR) today to evaluate the current revenue situation in detail.

The IMF mission, currently on a 15-day visit to Dhaka, will separately meet NBR’s tax, VAT and customs policy members at NBR headquarters in Shegunbagicha, discussing several issues, including modernisation of the overall revenue administration, increasing tax to GDP ratio and customs facilitation.

The IMF mission will hold long discussion sessions with the NBR departments to know about the country’s present revenue and customs situation, before providing a $4.5 billion loan which Bangladesh is seeking from it.

IMF would seek information on the current tax revenue, capacity development in tax-revenue mobilisation and the new income tax law, said NBR sources.

The tax officials said that the revenue board is relentlessly trying to increase the tax to GDP ratio. Last year, around 30 lakh taxpayers submitted income tax returns.

The NBR is fully digitalising its tax management system. Once the system is digitalised, taxpayers will get all services digitally, starting from tax return submission to verification of income tax filing. Besides, the draft of income tax law has already been finalised, they added.

The VAT automation issue, a key concern of the IMF, will also be discussed in the meeting. Already the VAT automation project is at its end, NBR officials said.

IMF wants the government to expand the tax net and decrease the amount of indirect tax. Presently 65-70 percent of revenue comes from indirect tax. The NBR’s highest revenue target also is set in the VAT section.

Several VAT officials said that they are reducing VAT by 5-15 percent in different stages and trying to expand VAT inclusion through a third party and electronic fiscal device or sales data controller.

Trade mobilisation through customs facilitation for international trade is another concern for IMF.

According to a report of NBR’s Automated System for Customs Data (Asycuda) team, presently, the Asycuda World has set up connectivity with six customs houses, 13 land customs stations, customs bond commissionerates, and all the private inland container depots.

NBR is also working to introduce the National Single Window, aiming to reduce the time and cost of doing business.

The NBR officials hope that after implementing the NSW, the average processing time for import will be reduced to five days which is about 7-15 days at present.

Top VAT officials said if Bangladesh cannot convince IMF and get the loan, the economic strain in the country will deepen further triggering reserve shortages and disruption of local production which ultimately will affect the revenue collection.

Earlier, the government enacted the VAT Act in 2012 following IMF prescription for getting around $100 crore loans under the Extended Credit Facility (ECF) of the lending agency. The IMF executive board approved the loan only after Bangladesh enacted the act.