Nat’l budget today Muhith eyes hefty revenue target [ Tritiyo Matra News ]

Nat’l budget today Muhith eyes hefty revenue target

Local June 04, 2015

Finance minister AMA Muhith is going to unveil yet another ambitious budget today, widening the tax net to achieve a hefty revenue target.The minister is expected to propose a budget outlay of around Tk 2, 95,000 crore, with a five per cent deficit to gross domestic product.
While the proposed budget is likely to forecast the next GDP to grow at less than the current year’s original estimate on economic expansion, Muhith’s main target will be to shore up confidence of the country’s businesses amid political uncertainty.
The economy as a whole and investors in particular will be eager to see stimulus and fiscal incentives in the draft budget to give boost to manufacturing activities and kick-start stagnant businesses.
‘We have to see how the budget lures investment from a shying private sector, as public investment made largely in the form of capital intensive tools seldom yields expected economic growth,’ AB Mirza Md Azizul Islam, former finance advisor to the caretaker government, told New Age on Wednesday.
‘It’s a challenge for Muhith to drive the economy with private investment for better revenue income and employment generation.’
The upcoming budget is set to announce 6.2 per cent inflationary target and five per cent budget deficit, according to the budget document, seen by New Age.
The annual development programme to be proposed is at Tk 97,000 crore, up by 38.37 per cent from the revised estimate for 2014-21015 fiscal year.
The estimated outlay of the budget for the next fiscal year is more than 15 per cent of the current budget of Tk 2,50,506 crore.
The revenue earning target has been set at Tk 2,08,000 crore for the upcoming fiscal year, up by Tk 45,331 crore, or 21.79 per cent from the revised estimate.
However, the target set for revenue board that generates around 80 per cent of the government’s yearly revenue income is likely to see a growth target set at 30.37 per cent over the revised target.
‘It is an absurd proposition given the statistics for the last five years, with NBR in 2010-2011 fiscal year achieving the highest 24 per cent growth,’ Aziz said. ‘It is thus going to be another ambitious budget.’
Of the total, Tk 1,76,000 crore to be earned by NBR, Tk 6,000 crore is under the head of non-NBR tax and Tk 26,000 crore from non-tax revenue, the document shows further.
To achieve the revenue target, NBR will mainly focus on increasing income tax nets while it will also bank on getting more revenue from VAT.
Amid lackluster performance, the finance ministry revised down the revenue earning target for the current fiscal year. Revenue target from NBR was slashed to Tk 1,35,028 crore from Tk 1,49,720 crore, non-NBR from Tk 5,572 crore to Tk 4999 crore and non-tax revenue estimate had been slashed to Tk 22,662 from the original estimate of Tk 27662 crore.
The revenue officials concerned said they would actually heavily fall behind even the revised targets.
In the budget for 2015-16, around Tk 17,000 crore of additional fund is expected to be earmarked to finance the new pay scale, due to take effect from July, for civil servants, military officials, teachers and pensioners, a budget official in the finance ministry said.
Senior finance officials attributed the struggling economy and lack of investment in the GDP for lower than current year’s original GDP, set at seven per cent for the next financial year. They said the revised 6.51 per cent growth has little chance of being achieved when the final tally on GDP is completed.
The total budget deficit for the proposed budget will be fixed at Tk 85,835 crore, a competent source at the finance ministry said.
Of the sum, Tk 56,651 crore would be managed by bank borrowings and savings instruments, and the rest from foreign assistance.
The centre for policy dialogue at a media briefing this week urged for reforms in the fiscal policies and emphasis on boosting capacity of major macro-economic institutions to take the country on to the higher growth trajectory.
The draft budget, however, will try to back the listed companies by lowering their corporate tax by 2.50 per cent and ward off concern of individuals by raising the tax-free threshold to Tk 2.50 lakh from the current slab of Tk 2.20 lakh.
However, much to the worry of the individual taxpayers, minimum tax is likely to be proposed at Tk 4,000, replacing the current three slabs ranging between Tk 1,000 and Tk 3,000, subject to urbanized, semi-urbanised and rural locations.