NBR Chairman Urges Finance Adviser to Cut Budget Size

Md Abdur Rahman Khan, Chairman of the National Board of Revenue (NBR), called on the Finance Adviser on Monday to reduce the size of the upcoming national budget, emphasizing the need to provide some relief to the general public.

In his remarks at a pre-budget meeting with the Economic Reporters’ Forum (ERF) at the Revenue Building, Khan stated, “I have urged the Finance Adviser to consider cutting the budget size and offering relief to the people.”

Khan also expressed confidence that the upcoming budget would be both business-friendly and beneficial to the economy, though he acknowledged that such measures might result in some revenue loss. “We might lose some revenue due to this approach, but the long-term benefits will outweigh the short-term challenges,” he added.

He further clarified that taxpayers who had previously benefited from reduced tax rates would be required to revert to the regular tax rates starting in the next fiscal year. “We will propose this to policymakers, and we believe it will bring long-term benefits for everyone,” Khan explained.

The NBR chairman highlighted the low number of quality taxpayers in the country, noting that efforts to boost tax collection had been intensified. “We have adopted an aggressive policy to increase the tax base and ensure fairness in tax collection,” he said.

Khan also touched upon the country's ongoing battle with tax evasion. “We are working on enhancing operational efficiency and tackling tax evasion, which has unfortunately become a widespread issue,” he remarked.

On the subject of Value Added Tax (VAT), Khan acknowledged the current state of disarray. “The VAT system is in a state of total disarray,” he said. “If we can properly enforce input VAT credits and standard VAT rates, many businesses will benefit from a rate of less than one percent.”

Referring to the VAT Law, which was introduced in 2012 and later amended in 2019, Khan noted that the law had become increasingly distorted over time. “The original VAT system was based on accounting and invoices. Unfortunately, we have undermined this system, and as a result, VAT collection is not growing as expected. Our goal is to restore discipline to the VAT system.”

When discussing the potential reintroduction of wealth tax, Khan explained that it had been in place in Bangladesh from 1963 until its abolition in 1999. He suggested that digitizing the tax system and implementing an asset valuation model could reduce wealth inequality and create an additional source of revenue.

“If we can digitize the system and establish a consistent model for asset valuation, it will not only reduce wealth disparities but also generate new revenue streams,” he said. Khan also hinted that the government might eventually reintroduce a wealth tax, moving away from the current surcharge on wealth if a fair and transparent method of land and property valuation could be established.

Finance Adviser’s Reassurance:
In response to Khan’s proposals, the Finance Adviser assured the public that the upcoming national budget would be rational and prioritize the country's local needs. The Finance Adviser committed to ensuring that the budget balances the requirements of economic growth with the welfare of the people.