Revenue earnings to suffer shortfall in FY18: CPD
Centre for Policy Dialogue (CPD) said revenue collection in the current fiscal year 2017-18 could suffer a shortfall due to non-enforcement of the Value Added Tax and Supplementary Duty Act, 2012 and suggested the government to focus on direct tax and non-NBR revenue sources to offset this deficit.
“The shortfall in revenue collection could be between Tk 43,000 crore and Tk 55,000 crore in FY18,” said CPD’s distinguished fellow Dr Debapriya Bhattacharya while speaking at a briefing titled “National Budget FY2017-18: Post-Approval Observations” at the city’s BRAC Centre Inn today.
He said reduction of one percent duty at import level will not have any impact on revenue earnings. Supplementary duty could boost earnings but revenue earnings will fall because of changes in imposition of VAT in service sector, he added.
Bhattacharya said the Value Added Tax and Supplementary Duty Act, 2012 could not be enforced for three reasons. Firstly, the National Board of Revenue (NBR) had lacking in technical preparation and for this reason, it was not possible to calculate real impact of VAT, he said. Secondly, coordination was not created among the people and institutions involved in implementation of the VAT law and thirdly, what social impact the VAT law will create on the income-expenditure of the consumers was not realized, he said.
He suggested preparing a post-budget work-plan based on three specific targets-maintaining the existing macroeconomic stability because macro economy will face pressure if any imbalance between income and expenditure, increasing private sector investments and focusing on public expenditures that create jobs.
CPD also come up with six proposals for improving the overall budgetary earning-expenditure, which include maintaining the existing trend of revenue collection, becoming more conscious in managing non-development expenditures, reconsidering the priorities of development expenditures, refraining from high cost borrowings, handling the negative pressures in respect of foreign loans and taking forward the reform programmes.
Responding to a question, Bhattacharya emphasized on constitution of a reform commission urgently to ensure good governance in the banking sector. He also suggested the judicious use of the budget allocation for the capital markets.
CPD’s distinguished fellow Dr Mustafizur Rahman, executive director Dr Fahmida Khatun, research director Khandker Golam Moazzem and research fellow Tawfiqul Islam Khan, among other, were present at the briefing.
Source: BSS
