Economy
NBR Adopts Three-Pronged Approach for Revenue Growth
The National Board of Revenue (NBR) is implementing a comprehensive strategy to substantially increase revenue collection from domestic sources, focusing on digital transformation, tax net expansion, and administrative capacity enhancement.
According to an official document, the primary objective is to simplify and enhance transparency in tax payments, thereby improving taxpayer services to facilitate increased revenue collection by the NBR.
Major reform measures have been taken by the government, as outlined in the Medium Term Macroeconomic Policy Statement (2023-24 to 2025-26) of the Finance Ministry.
The implementation of the VAT & Supplementary Duty Act 2012 in July 2019 is expected to significantly boost VAT and supplementary duty collection in the medium term, following initial setbacks and COVID-19-related challenges.
The enactment of the new Customs Act, replacing the Customs Act 1969, incorporates international best practices to streamline customs processes and facilitate custom duties collection.
Similarly, the new Income Tax Act aims to create a conducive environment for taxpayers, simplify income tax assessment and collection procedures, and promote domestic and foreign investment.
To support the implementation of the new VAT law, the NBR initiated the ‘VAT Online Project (VoP)’ in operation since 2013, enhancing automation measures such as online VAT registration, central registration system, and online return submission.
Additionally, electronic payment (e-payment) systems for customs duties, income tax, and VAT have been introduced to facilitate convenient and timely payments.
The government’s launch of the Automated Invoice Portal (A-Challan) aims to ensure real-time deposit of government funds, prevent fraudulent activities, and eliminate discrepancies in revenue collection.
Furthermore, various initiatives, including eTDS Environment for income tax processing, Electronic Fiscal Devices (EFD) for VAT collection, and mandatory use of NBR-prescribed VAT software for VAT-registered industries, have been implemented to enhance tax compliance and transparency.
The NBR plans to operationalize a risk management system to optimize import clearance processes, streamline bonded warehousing, and conduct a Time Release Study to improve customs clearance efficiency.
Efforts to expand the taxpayer base include making return submission mandatory for all TIN-holders and implementing measures such as Online National Single Window, Post Clearance Audit, and Advance Ruling to boost international trade dynamics.
Administrative expansion of the income tax department is also underway, along with the introduction of the Document Verification System (DVS) to enhance financial discipline and tax collection transparency.
During the eleventh month of the current fiscal year, the country’s foreign currency reserves have fallen below $19 billion for the first time. After paying off some import bills, the reserves have now stood at $18.26 billion on Sunday.
According to the International Monetary Fund (IMF), as of May 8, the total foreign currency reserves of the country were $19.82 billion.
Mohammad Mezbauul Haque, the spokesperson of Bangladesh Bank, informed that through the Asian Clearing Union (ACU), the central bank has paid off import bills totaling $1.63 billion over the past two months.
However, Bangladesh Bank maintains that after paying off the import bills, the foreign currency reserves now stand at $23.71 billion.
According to the Central Bank’s accounts, the reserves were $25.27 billion on May 8.
The Dhaka Stock Exchange (DSE) and the DSE Brokers Association (DBA) have expressed gratitude towards Prime Minister Sheikh Hasina for her directive to list government companies in the capital market, a move hailed as timely and positive.
The directive was issued during the recent meeting of the Executive Committee of the National Economic Council (Ecnec) last Thursday.
Dr. Hafiz Muhammad Hasan Babu, Chairman of DSE, described the directive as a significant step towards enhancing the dynamics of the capital market. He emphasized that besides invigorating the capital market, this move would also attract foreign investment and promote sustainable development.
Despite previous efforts, government institutions had not been listed in the stock exchange, according to a notification issued by the DSE. The Prime Minister’s directive is seen as a pivotal step towards revitalizing and expanding the economy.
Dr. Babu further remarked, “The listing of reputable companies in the capital market, as directed by the Prime Minister, will greatly benefit the country’s economy. It will also enhance investor confidence.”
Similarly, the DBA released a notification applauding the Prime Minister’s directive, terming it as positive and timely for the capital market.
Saiful Islam, President of DBA, expressed optimism about the directive’s potential to accelerate the country’s capital market and overall economy. He pledged support to relevant government departments and regulatory bodies in implementing the directive, ensuring its positive impact on the economy, including the capital market.
India has expressed interest in financing Bangladesh’s Teesta project, announced Foreign Minister Hasan Mahmud. Speaking to reporters after a meeting with Indian Foreign Secretary Vinay Mohan Kwatra, Mahmud stressed the importance of aligning the project with Bangladesh’s needs. He confirmed discussions on the Teesta issue during the meeting. Mahmud also affirmed Prime Minister Sheikh Hasina’s upcoming visit to New Delhi, indicating that the finalization of the date would depend on the formation of the new Indian government following ongoing elections.
Meanwhile, the IMF has approved a $1.15 billion staff-level loan for Bangladesh in its third tranche. Mahmud noted the ongoing elections in India and the subsequent formation of the new government as factors influencing the scheduling of PM Hasina’s visit.
When asked about the sequence of visits to India and China, Mahmud suggested Delhi’s geographical proximity to Bangladesh. Diplomatic sources suggest PM Hasina’s visit to India is planned for early July, following India’s elections.
Pre-election surveys indicate strong prospects for Indian Prime Minister Narendra Modi’s re-election. Modi previously congratulated PM Hasina on her electoral victory in January, expressing optimism about strengthening ties between the two nations.
The last bilateral engagement between the prime ministers occurred during the G-20 Leaders Summit in September 2023. Modi is expected to invite South Asian and BIMSTEC leaders to his swearing-in ceremony, fostering regional cooperation.
Addressing border killings, Mahmud emphasized the government’s commitment to ending such incidents and promoting the use of non-lethal weapons by border forces. Discussions also covered enhancing physical and people-to-people connectivity, including cooperation with India to import hydropower from Nepal and Bhutan through India. Mahmud highlighted the need to further ease visa restrictions to strengthen people-to-people relations.
