Govt relying on stimulus packages to offset Covid shock
Publish- September 11, 2020, 10:34 AM
Fahad Ferdous - UNB Staff Writer
Update- September 11, 2020, 10:56 AM
The government is relying on its declared Tk 1.03 trillion stimulus packages for various sectors to offset the COVID-19 shock and bring back normalcy in overall economic activities for calculating relatively higher revenue earnings for a mid-term period.
According to an official document, the government has estimated Tk 4318 billion for revenue collection for 2021-22 fiscal year while Tk 4927.6 billion for 2022-23 fiscal. Besides, the target for the current 2020-21 fiscal year has been fixed at Tk 3780 billion.
It is expected that it would be helpful to achieve the revenue target of the government during the mid-term period through implementing declared stimulus packages and the reform programmes taken in the revenue sector.
The revenue target for the 2020-21 fiscal year has been fixed at 8.6 percent higher than the revised target of the 2019-20 fiscal year. The initial revenue target for the 2019-20 fiscal was Tk 3778.1 billion, which was earlier fixed at Tk 3480.7 billion.
To achieve the revenue target, the collection has to be increased by 22.5 percent than the actual revenue target in 2018-19 fiscal, which was Tk 2518.8 billion.
The document mentions that installation of electronic fiscal device, full implementation of new VAT Law and new customs law the revenue collection will be strengthened on mid-term basis.
Of the total revenue target for the next 2021-22 fiscal year, the National Board of Revenue (NBR) will provide Tk 3755.4 billion where Tk 1297.2 billion will come from income and profit tax, Tk 415.7 billion from customs duties and Tk 1999.5 billion from VAT and supplementary duties.
The non-NBR revenue will be Tk 179.2 billion while the non-tax revenue Tk 383.4 billion.
In the 2022-23 fiscal year, the target for the NBR has been estimated at Tk 4268.2 billion where Tk 1476.7 billion will come from income and profit tax, while Tk 477.4 billion from customs duties and Tk 2265.6 billion from VAT and supplementary duties.
The non-NBR revenue will be Tk 222.5 billion, while the non-tax revenue will be Tk 436.9 billion.
Meanwhile, Finance Minister AHM Mustafa Kamal recently said the government will be able to achieve the huge revenue collection target if other economic parameters remain sound in the days to come.
“The entire world is being affected by Covid-19 …Bangladesh is also affected. We’re working to offset the impacts and maintain the revenue collection [trend]. We won’t fail in revenue collection if other economic parameters remain sound,” he said.
Referring to the positive trend in remittance inflow and export earnings in July and the first half of August, he said the revenue collection will increase if various economic indicators continue to do better.
The government, in the wake of the coronavirus (Covid-19) outbreak, has announced 19 stimulus packages worth Tk 102,957 crore which is 3.7 percent of total GDP to revitalise the country’s economic activities and production system.
Various economic sectors, including export-oriented industries, small, medium and cottage industries, agriculture, fish farming, poultry and livestock have been brought under these incentive packages.
Among the packages, Tk 30,000 crore has been allocated for providing working capital facility to the affected industries and services sector organisations while Tk 20,000 crore stimulus package for supplying working capital to the small (including cottage industries) and medium industrial enterprises.
A special fund for the export-oriented industries with Tk 5,000 crore and expanding the facilities of Export Development Fund (EDF) was introduced by Bangladesh Bank with Tk 12,750 crore, the document says.
Incentive packages like Pre-Shipment Credit Refinance Scheme with Tk 5,000 crore, agriculture subsidy with Tk 9,500 crore, agriculture refinancing scheme with Tk 5,000 crore, refinancing scheme for the low-income professional farmers and small businessmen with Tk 3,000 crore are also there.
A total of Tk 2,500 crore was allocated for Palli Sanchay Bank, Karmasangsthan Bank, Probsahi Kalyan Bank and Palli Karma Sahayak Foundation to help the youth and expatriates who have lost their jobs due to the pandemic.
Another amount of Tk 5,000 crore has been allocated for the farmers at only 4 percent interest to offset the agriculture fallout of the Covid-19 and the government will waive Tk 1,840 crore bank interests of the people affected badly by the nationwide shutdown enforced to contain the pandemic.