TBT DESK: National Board of Revenue (NBR) Chairman Md Abdur Rahman Khan on Thursday categorically said the government is firmly committed to supporting local producers rather than offering incentives to commercial importers.
"In principle, we have said there shall be a duty gap between our manufacturers and commercial importers," he said while speaking at a pre-budget meeting held at the conference room of the Revenue Building in the capital.
The head of the revenue authority said the NBR's responsibility is to remove all obstacles for honest and compliant businesspeople.
"But just remember one thing, if anyone misuses any facility, that person will not be allowed to do business in Bangladesh anymore," he warned.
He also mentioned that his organisation is ready to do everything for the sake of removing hurdles for trade and commerce in the country aiming to gain bigger revenue collection.
Expressing dissatisfaction with the very lower number of Value Added Tax (VAT) registration in the country, Abdur Rahman Khan said there is no reason to have a VAT registered number below six lakh. "This number should have crossed one crore mark long ago," he said.
To increase the VAT registered business entities, he said, the NBR started installing electronic fiscal devices (EFD) on its own and after getting impressive results later gave it to third parties. "But that also failed, we are working on various types of alternatives, you will see the result within the shortest possible time," he said.
The NBR chairman said his organisation faced administrative constraints for various reasons, but efforts are underway to resolve them.
He also said he is under pressure from development partners due to the very low tax GDP ratio of the country. "Both in the morning and evening, the development partners are squeezing me for this very lower ratio… and the reality is that, there is no country in the world that collects such lower revenue," he said.
Bangladesh's tax-to-GDP ratio stands at 7.3%, significantly lower than neighboring countries like India (12%), Nepal (17.5%), Bhutan (12.3%), and Pakistan (7.5%).
This low ratio hampers the government's ability to invest in critical sectors such as health, education, and social protection, thereby affecting economic growth and perpetuating poverty and inequality.
The NBR is actively working to improve this ratio by targeting tax evasion and increasing compliance. Currently, out of approximately 11.4 million Taxpayer Identification Number (TIN) holders, only 4 million have submitted their income tax returns. Efforts are underway to address this gap and enhance revenue collection.
The government aims to raise the tax-to-GDP ratio to 11.2% by the fiscal year 2025-26. To achieve this, measures such as implementing a simplified 15% Value Added Tax (VAT) system are being considered.
Additionally, the International Monetary Fund (IMF) has emphasized the need for Bangladesh to increase its tax-to-GDP ratio, recover defaulted loans, and implement banking sector reforms.