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Revenue needs to increase by three folds to meet IMF conditions

The International Monetary Fund (IMF) loan package stipulates that Bangladesh’s tax-to-GDP ratio must reach 9.5 percent; according to the Policy Research Institute (PRI), this can only be achieved by increasing revenue collection by Tk2.34 trillion over the course of the following three fiscal years. To meet the IMF recommendations, the NBR must generate an additional Tk 650 billion in revenue in fiscal year 2023–2024. In order to qualify for a $4.7 billion loan package, Bangladesh must expand its GDP by 0.5% annually in fiscal years 24 and 25 and 0.7% annually in fiscal year 26.

According to a PRI analysis, raising the tax-to-GDP ratio by 5 percentage points (i.e., in order to reach the 8th FYP target) may boost economic growth by up to 3.3 percentage points and lower the poverty headcount rate by up to 2.2 percentage points. The PRI suggests lowering tax exemptions, raising personal income tax compliance, enacting quick-fix VAT reforms, and raising business compliance, among other things. Increasing the number of persons registered and implementing policies to improve payback are other suggestions made by PRI. For example, the government should make it mandatory to provide a tax return in order to access services.

 

 

Source for more details:   

Financial Express

Dhaka Tribune

 

 

Source for more details:

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