The National Board of Revenue (NBR) is facing a significant challenge in collecting a substantial amount of revenue, particularly from government entities. The current situation involves a growing backlog of cases, resulting in unrecovered funds and hindering the achievement of revenue collection targets.
As per NBR reports, approximately Tk25,000 crore of value-added tax (VAT) remains unrecovered, with almost Tk24,000 crore owed by government entities. There are around 10,000 pending cases involving Tk21,600 crore, and the actual amount owed will be determined upon case resolution.
The Income Tax and Customs Department also grapple with a substantial amount of revenue stuck in arrears and lawsuits, a significant portion of which is held by government institutions. This non-payment by government entities is viewed as a major obstacle to establishing order in the revenue sector.
Experts, including Mustafizur Rahman from the Centre for Policy Dialogue, emphasize that the culture of non-payment contradicts revenue discipline and creates a detrimental cycle. The failure to pay dues on time not only hinders revenue collection but also discourages regular taxpayers.
NBR officials acknowledge the challenge and express their commitment to collecting outstanding revenue and reducing the number of cases in the High Court. However, the issue persists, with government entities, such as Petrobangla, owing significant amounts. Efforts to collect revenue from Petrobangla have faced obstacles, and the entity indicates willingness to pay if allocated funds by the finance ministry.
Other government entities, including the Civil Aviation Authority, Chattogram Port Authority, and several municipalities, also owe substantial amounts to the NBR. Former NBR member Md Farid Uddin highlights the importance of government institutions setting an example by promptly paying dues, fostering compliance across organizations.
The backlog of cases further complicates the situation, with Tk21,600 crore tied up in pending cases. Some instances reveal historical losses in high-stakes cases, leading to zero revenue gains. Experts attribute this to poorly justified claims and the exploitation of the legal system to delay or evade tax obligations.
To address these challenges, there is a mention of the positive impact of Electronic Fiscal Devices (EFD) on VAT collection from businesses. The NBR reports that businesses using EFD machines experience increased VAT payments, with plans to install a total of 60,000 EFD machines in the current financial year. However, challenges persist in cases where no sales information is input into the EFD machines.
In conclusion, the NBR is grappling with a complex situation involving unrecovered revenue, a backlog of cases, and challenges with government entities. Efforts are being made to address these issues, but systemic changes and timely communication between NBR departments and affected entities are emphasized to prevent the accumulation of outstanding revenue and cases.
