Al Amin :
The National Board of Revenue (NBR) is set to strengthen its Research and Statistics wing following recommendations from local experts and the foreign development partner, the International Monetary Fund (IMF).
The strengthening is necessary to carry out reforms vital for the public exchequer to ensure greater mobilization of domestic resources, NBR officials said.
According to officials, it is not only a recommendation from development partners, but NBR officials have also been demanding the strengthening of the wing for some time now as proper statistics are required to formulate the right policies.
Currently, the Research and Statistics wing is one of the neglected departments of the revenue board due to a lack of manpower.
However, the department can play a vital role in increasing revenue mobilization by providing sufficient data and statistics to the policy wings of the NBR, the officials added.
For instance, while the NBR provides significant tax exemptions to different sectors, there is little information available about their impact on the overall economy.
Considering this situation, the NBR has decided to restructure the research team based on the suggestions of IMF delegations, the officials stated.
They further mentioned that economists and experts are likely to be recruited to make the research wing more effective and up-to-date for better data and statistical analysis.
The NBR faces numerous challenges, including mitigating fiscal pressure by collecting more revenue.
It not only lacks the required manpower but also needs to update and expand the Table of Organization and Equipment (TO&E), officials noted.
Although the NBR collects around 85 per cent of the country’s revenue, it spends less on revenue collection compared to other nations.
NBR data indicates that the board spends Tk 0.21 to collect Tk 100 in revenue.
To collect the same revenue, neighboring India spends Tk 0.60, Thailand Tk 0.71, Singapore Tk 0.79, Malaysia Tk 1, Germany Tk 1.5, and Japan Tk 1.7, according to NBR data.
Insiders said that spending less is not to the NBR’s credit because it collects less revenue compared to other countries.
Instead of spending less, they suggest regular reform of tax administration, investment in research and automation, and recruitment of more skilled personnel.
According to the International Monetary Fund’s (IMF) World Economic Outlook 2022, Bangladesh’s revenue-to-GDP ratio is 9.61 per cent, while it is 19.03 per cent in India, 26.41 per cent in Bhutan, 23.96 per cent in Nepal, and 12.06 per cent in Pakistan. Also, Bangladesh’s tax-to-GDP ratio is the lowest among South Asian countries.
The NBR must meet several IMF conditions as part of the $4.7 billion loan program. One condition is to increase the tax-to-GDP ratio by 0.5 percentage points in FY24, 0.5 percentage points in FY25, and 0.7 percentage points in FY26.
To achieve the target, the NBR will have to collect an additional Tk 2,34,000 crore in revenue over the next three fiscal years.
