The government has asked the National Board of Revenue (NBR) and other departments concerned for taking 'serious efforts' to increase revenue collection for financing development projects, officials have said.
Providing required fund for implementation of development projects has become a major concern for the government. Subsequently, execution of the annual development programme (ADP) is facing disruption, they added.
Finance Minister A H M Mustafa Kamal in a meeting on budget preparation for next fiscal year (FY), 2021-22, on Thursday underscored the need for taking efforts to raise revenue collection.
"Unless there is adequate money in hand, the development projects won't be implemented timely," he was quoted as saying by a senior official, who participated the virtual meeting.
Especially, implementation of the mega projects will face a standstill situation due to lack of required fund, he added.
During the July-November period of this FY, only Tk 384.73 billion, or 17.93 per cent of the total Tk 2.14 trillion ADP outlay, could be spent, which is the lowest in a decade.
The sluggish scenario is due to the Covid-19 pandemic-linked various types of disruptions, including failure to provide required fund adequately, according to the Ministry of Finance officials.
During the July-November period of FY 21, the NBR could collect some Tk 854.03 billion, showing a shortfall of Tk 275.56 billion from the target for five months.
In the meeting, the finance minister asked the officials concerned for taking steps, both financially and practically, to ensure availability of coronavirus vaccine, which may help resume economic activities in full swing without fear.
"Vaccine should get the highest priority," the minister reportedly said, and added that additional allocation for health sector should be on focus.
According to the officials, as discussed in the meeting, the budget for next fiscal year will emphasise ensuring allocation of required fund for priority sectors linked to fighting the Covid-19 pandemic.
Successful implementation of the pandemic-linked incentive packages, additional allocation for health sector, mechanisation of farming for increased food production, incentives in irrigation and seeds, and cash support in fertiliser procurement will also get priority in the next budget.
Massive employment generation, rural development, expansion of social safety net, building home for homeless people, continuation of distribution of low-cost food for low-income group of people, and human resource development will also get focus.
The meeting discussed to set targets of 7.7 per cent Gross Domestic Product (GDP) growth, Tk 35 trillion GDP size, keeping inflation at 5.3 per cent, investment at 32 per cent of GDP, revenue collection at 10.8 per cent of GDP, total expenditure at 16.7 per cent of GDP, and budget shortfall at 5.8 per cent of GDP.
Once massive vaccination begins, people will start regaining confidence, leading to full swing commercial activities in the country, said another official.
The GDP growth target at 7.7 per cent for the next FY is thus logical, he added.
Contacted, research director of Centre for Policy Dialogue (CPD) Dr Khondaker Golam Moazzem told the FE that proper execution of digitally tax realisation can help the government to enhance revenue collection.
He said every year a large amount of taxes are avoided by one way or other. The government needed to take collective measures to stop such tax avoidance.
"The money laundering through trade mispricing needs to stop from where the government also can get some revenue," he said.
Mr Moazzem said it is logical that revenue collection will be less than the expectation in this pandemic hit period. In this case, the government has to prioritise its expenditure pattern in the next year too.
"The government now should focus on foreign assistance-based development project where local contribution is very less," he added.
Mr Moazzem thinks that the GDP growth target at 7.7 per cent for FY 2021-22 will be ambitious one, but its achievement will depend on the performance in FY 2020-21.
