July 18, 2024, 2:15 pm

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2019-06-19 20:46:10 BdST

Biggest revenue target ‘challenging’ on exemptions

Achieving the 'biggest' revenue target would be a challenging task with so many tax exemptions proposed in the budget, the revenue board chief said on Tuesday.

He said a Tk 3.25-trillion revenue target has been proposed for fiscal year 2019-20 against their projection of around Tk 2.50 trillion in the budget.

The government target is much higher than what was calculated earlier, National Board of Revenue (NBR) chairman Mosharraf Hossain Bhuiyan added.

He said such a target stumbles against tax exemptions offered in the budget in so many areas like agriculture, new investment, hi-tech park and special economic zone

"These (offers) would make revenue collection very challenging. If,,however,the economy runs well, we'll be able to attain the target," he said.

Mr Bhuiyan made the observations at a luncheon meeting arranged by Foreign Investors' Chamber of Commerce and Industry (FICCI) at a city hotel.

His remarks came against the backdrop of a sustained shortfall in revenue collection in the outgoing fiscal.

According to NBR, overall tax revenue collection fell short of the original target of Tk 2.96 trillion by around Tk 500 billion until March 2019.

Speaking as the chief guest, Mr Bhuiyan said share market is reeling in rumours and most of the actors in the market are not well aware of their business.

"So, we gave some fiscal relief to the investors in the capital market," he continued.

The NBR chief said tax exemption threshold on dividend income was proposed at Tk 50,000 from existing Tk 25,000-a budgetary measure hailed by many quarters.

But some businesses have raised concern over certain fiscal measures in the capital market, he stated. "We'll look into the matter for an amicable solution."

FICCI president Shehzad Munim said most of the people would not be able to pay the proposed 15-per cent tax on retained earnings and stock dividend.

Citing FDI (foreign direct investment) statistics released by the Bangladesh Bank, he said 40 per cent of FDI comes from retained earnings by multinationals.

It is a significant amount that investors retained in their businesses here, thus enabling them to invest for growth, Mr Munim mentioned.

"If we're to issue entire amount as dividend, most of the money would go out of the country as most of the shareholders are abroad."

"This needs to be relooked. Otherwise, it will cause a serious problem," the business leader cautioned.

He said some changes in the VAT law are difficult to understand and it needs to be ensured that they would not raise costs of business.

"Give us a bit of time, say six months, so that we can discuss to sort out all the small little issues regarding the law," he added.

Mr Munim also requested the NBR chairman to reconsider the proposal for a 2.0-per cent turnover tax on the telecoms sector.

FICCI vice-president Francois de Maricourt, among others, also spoke at the luncheon meeting.

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