IMF seeks to know impact of tax exemption on revenue sector reforms
S M Jahangir
The International Monetary Fund (IMF) has sought from the government the details about the tax-exemption facilities offered to various sectors in the budget for the current fiscal.
The multilateral donor wants to know about the justification of the tax-exemption facilities and their impact on the government's overall revenue income.
The government has extended the tax exemption, among others, to agro-processing, jute and textile industries up to June 30, 2008.
The IMF has also sought to know from the National Board of Revenue (NBR) the amount of loss it would suffer due to tax exemption, a senior NBR official told the FE Wednesday.
The official further said the Fund has also set August 15 as deadline for the NBR to send the particulars to it.
Sources, however, said the IMF would examine whether or not the government's existing tax-exemption support would clash with its on-going reforms in the revenue sector.
The government in association with the IMF is implementing the reform programme to help boost revenue collection.
One of the major conditions attached to the Poverty Reduction Growth Facility (PRGF) extended to Bangladesh by the IMF in June 2003 was to implement major reforms in its revenue collection system, sources said.
The establishment of the large taxpayers' unit (LTU), greater correlation between the taxpayers' identification numbers (TINs) and business identification numbers (BIN), streamlining the revenue administration and rationalisation of duty structures are high on the current reform agenda, they mentioned.
It also emphasised the need for a joint auditing systems and greater exchange of information between the value added tax (VAT) and the income-tax wings of the LTU to make the Unit effective and more functional.
Meanwhile, expressing its dissatisfaction over the current slow pace in the implementation of the reform programme, a visiting IMF delegation advised the revenue authority to speed up its execution process, according to NBR officials.
"The IMF delegation expressed its dissatisfaction over the progress made by the authority in revenue sector reform and reiterated the need for an early implementation of the reform programme," said the official.