The government has set an ‘ambitious’ revenue mobilisation target for the National Board of Revenue for the upcoming fiscal year (2017-2018), envisaging the highest collection — Tk 87,887 crore — from value-added tax riding on the new VAT law.
The government anticipates getting around 35.50 per cent of the total tax collection target of Tk 2,48,190 crore from VAT as it expects a significant boost in VAT collection after implementation of the new VAT and Supplementary Duty Act-2012 from July 1 this year.
The VAT collection target is Tk 72,764 crore for the outgoing fiscal year of 2016-2017.
In the next fiscal year, the second highest revenue — Tk 86,867 crore or 35 per cent of the total collection target — will come from income tax, according to the revenue board.
The remaining Tk 73,436 crore or 29.50 per cent will be generated from customs duty.
Targets of income tax and customs duty collection in the current fiscal year are Tk 71,940 crore and Tk 55,670 crore respectively.
Officials of the NBR said that VAT revenue might increase significantly after the implementation of the new VAT law as it would impose single 15 per cent VAT on almost all goods and services.
The VAT online system under the new law would enhance compliance and prevent VAT evasion and hence boost revenue generation, they said.
They said that the new law and other tax measures might help them achieve the target.
They, however, said that the overall revenue collection target was an ambitious one considering the growth target at around 35 per cent compared with that of the revised collection target (Tk 1,85,000 crore) for the current fiscal year.
The tax authorities would also face challenge to meeting the target if the rate of VAT is reduced following demands from the business community from the 15 per cent stipulated in the new law, they said, adding that the NBR was also likely to widen the VAT-exempted areas under the law.
Revenue collection grew by 14 per cent on average in last five years, officials said.
Till February this year, the revenue collection by the NBR, however, grew by around 20 per cent.
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