The government is set to announce an ambitious revenue income, and unrealistic borrowing targets in the budget for the upcoming fiscal year (FY2019-20), to be unveiled on Thursday (Jun 13).
Revenue target for the National Board of Revenue (NBR) for FY2019-20 has been set at Tk 3,256 billion, non-NBR revenue at Tk 145 billion, and non-tax revenue income target at Tk 377.1 billion, according to the draft budget document.
The target for NBR, which typically earns around 75% of total revenue income of the government, is 16.02% more than the revised target of Tk 2806.3 billion.
NBR registered only a 7.1% revenue growth during the July–March period of current fiscal year (FY2018-19), falling Tk 504.25 billiob short of its original target for the nine months.
Senior NBR officials believe the 16.02% growth target will ultimately change to above 20%, as they are certain that the revised revenue target for FY2019-20 will be impossible to achieve.
“Higher revenue target means more tax on people, and tough collection drive from taxmen,” a senior NBR official told Dhaka Tribune.
He said it is always not feasible to impose higher tax on businessmen and ordinary people. "Additionally, logistics and manpower of the NBR to help augment revenue income cannot be increased overnight," he added.
The government set NBR's revenue target at around 40% higher than the earnings of the outgoing fiscal year FY2017-18.
On the borrowing front, the upcoming budget has set a target of borrowing only Tk 265 billion from savings tools, and Tk 548 billion from banks.
Furthermore, borrowing target from foreign sources for deficit financing has been set at Tk 605.8 billion, which was Tk 605.85 billion in FY2018-19.
According to the draft budget document, total budget deficit for the upcoming fiscal year is Tk 1453.8 billion—5% of the gross domestic product (GDP) of next year.
In the first nine months of FY2018-19, the government borrowed Tk 682.58 billion from savings instruments, against the yearly target of Tk 261.97 billion.
It is widely perceived that the sale of savings tools will reach somewhere around Tk 100,000 as of June, the last month of the current fiscal year.
The budget deficit for FY2018-19 is Tk 1212.42 billion.
Budget outlay for FY2019-20 has been set at Tk 5231.91 billion, excluding allocation for autonomous organizations.
Sources at the Economic Relations Division under the Ministry of Finance said, they would face nearly Tk 150 billion shortfall from the budgetary target in getting foreign aid this fiscal year.
On the other hand, finance ministry officials said the bank borrowing target of Tk 420.29 billion for the current fiscal year would be overshot by as low as Tk 100 billion.