The government will rationalise tax exemptions once the country’s economic situation improves to some extent, according to National Board of Revenue (NBR) Chairman Md Abdur Rahman Khan.
“To boost revenue, we must come out of the culture of tax exemptions. Our development partners have asked us to discontinue this practice for our benefit,” he said, describing the practice as discriminatory.
Khan made these remarks while responding to queries from journalists at the NBR headquarters in Agargaon yesterday.
The revenue authority is considering bold measures regarding tax exemptions, especially as the International Monetary Fund (IMF) has been persistently urging the government to cut them in a bid to increase the country’s tax-to-gross domestic product ratio, which is among the lowest in the world.
“We have no alternative but to cut exemptions,” he said.
“We will do it timely. We have already started. It’s not like we are sitting idle. Except for essential commodities, we will take steps immediately where we have the scope.”
The interim government has introduced various tax exemptions on the import of essential commodities, including rice, oil, eggs, and onions in recent months. The NBR chairman attributed these exemptions to the ongoing “economic crisis”.
He also hinted at the imminent withdrawal of some tax exemption facilities.
“We have issued some statutory regulatory orders to cancel existing exemptions. Some more will be issued later,” he said.
However, Khan assured that no forceful measures would be taken.
“We will move only after discussion with traders,” he added.
Despite the revenue board allowing significant exemptions at the import stage, the prices of essential commodities have not yet reduced to expected levels, he said.
Khan also said that the NBR was set to observe the National VAT Day today and “VAT Week” from December 10 to 15.