The New Nation - Internet Edition

ACCORDING to recent press reports, the government has planned 25 measures to increase the tax-GDP ratio which decreased in this financial year because of a shortfall in revenue earnings. The ratio is the total government tax collections divided by the GDP which is the total market value of goods and services produced domestically in a given period. The proposed measures in this regard would be placed in Parliament for approval during a presentation on the first quarter of budget implementation by the finance minister. The tax -GDP ratio is now only 8.5, which is one of the lowest in South Asia. If the revenue income rises by 0.7 per cent a year, infrastructure deficiency in the country, as mentioned in the draft presentation by the ministry concerned, can be removed.

If dynamism is not induced, revenue collection will not be satisfactory by the year end. The measures to be suggested for revenue increase obviously include enhancement of taxes on luxury goods, tobacco and alcohol as part of short-term plan. The National Board of Revenue will need to bring commercial activities of non-governmental organisations under the tax net. As reported, the board may re-examine tax holiday, given to corporate houses. Income, VAT and import duty laws may be updated as part of the mid-term plan.

Because of the lax attitude of the government, many NGOs took much advantage by launching commercial activities in profitable areas though they initiated their works for ideals like poverty reduction, promotion of education and development of agriculture in this poor country. The International Monetary Fund has for long been pressing the government to initiate 'reforms' in revenue management to increase revenue collection as the existing system is corruption ridden and not helpful at all for dynamism.