The government is at risk of losing non-tax revenue worth Tk 500 crore as it has announced easing interest on export-oriented import facilities affecting the earnings of the Bangladesh Bank, officials said.
The interest rate for facilitating raw material imports under back-to-back letters of credit has been reduced to 2 per cent from 2.73 per cent with a stimulus package worth Tk 12,750 crore under the BB’s Export Development Fund.
Besides, an amount of Tk 5,000 crore has been made to facilitate the pre-shipment credit refinance scheme at 7 per cent interest rate from previous nine per cent.
The measures, part of the four fresh financial packages worth Tk 67,750 crore announced by prime minister Sheikh Hasina on Sunday to enhance the country’s efforts to overcome the economic losses due to the coronavirus situation, would cut the income of the central bank by around Tk 500 crore.
The BB had provided over Tk 1,500 crore as non-tax revenue in the last fiscal year.
In the current fiscal year, the government has targeted to achieve overall non-tax revenue at Tk 37,710 crore.
Finance Division additional secretary Habibur Rahman said that they were not much worried about the higher expenditure from the budget in tackling the coronavirus fallout but with the low revenue generation.
The NBR lagged behind its target by whopping Tk 45,000 crore in the first eight months (July-February) of the fiscal year.
The revenue shortfall would grow bigger, said Centre for Policy Dialogue distinguished fellow Mustafizur Rahman.
He said that the economic situation was not well amid negative export growth, slowdown in import, poor performance of telecom and cigarette sectors and bad shape of banking sector even before the coronavirus outbreak struck.
National Board of Revenue chairman Abu Hena Md Rahmatul Muneem told New Age on Tuesday that they were facing revenue shortfall amid the coronavirus pandemic. He said that the stimulus packages announced to facilitate revival of the economy would help the NBR to recoup the revenue losses in future.
The public health safety is now the top priority, he said.
It is estimated by the Finance Division that around Tk 3,000 crore in subsidy would be required for payment of 4.5 per cent interest against packages worth Tk 30,000 crore and Tk 2000 crore for industries and service sectors respectively.
Against the backdrop of a huge revenue shortfall, finance ministry officials said that the economic shocks due to the coronavirus pandemic in the closing quarter of the current fiscal year would push the budget deficit to over 6 per cent.
The government has also announced to bear 5 per cent of the 9-per cent interest on the loans to be given to small and medium enterprises from another package worth Tk 20,000 crore.
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