NBR-IMF to Hold Meeting on Loan Condition Progress Today

The National Board of Revenue (NBR) and a delegation from the International Monetary Fund (IMF) are scheduled to meet on Friday to go over the budget's activities and progress toward meeting the conditions imposed by the IMF for Bangladesh's $4.7 billion loan.

Numerous individuals with ties to the NBR have informed that NBR Chairman Abu Hena Md Rahmatul Muneem will attend the meeting. The NBR chairman declined to acknowledge conducting such a meeting when pressed.

The conference, according to insiders, is designed to address IMF inquiries regarding the NBR's plans to boost revenue sector capacity as well as tax collection.

The sources claim that the NBR has already assembled information for the conference from its three departments, Income Tax, Value Added Tax (VAT), and Customs.

Under the condition of anonymity, a senior NBR official told that "as per the IMF programme and time frame, most initiatives have either been implemented or are being implemented."

In order to meet IMF requirements, the NBR must implement tax revenue measures that will contribute 0.5% more GDP to the FY24 budget. The IMF also established various programs for this, such as streamlining tax expenditures with actions to be taken in the budget.

The NBR has taken a number of actions through tax rate increases or reductions in tax exemptions in the budget, including higher taxes on real estate sales, cigarettes, alcohol, and other industries.

In a same manner, the revenue authorities also revoked several exemptions from some industries, including as the polypropylene staple fiber, software, and LPG cylinder industries. 

Additionally, the facility for reducing customs duties was reduced in various local manufacturing sectors. Sunglasses, plastic, aluminum, and cigarette products now have higher supplemental VAT rates.

During the discussion with IMF representatives, the NBR Chairman might bring up these issues, according to sources.

The main areas that the IMF would like to know about are the quantity of Business Identification Holders (BIN), the status of the Electronic Fiscal Device (EFD) installation, the medium-term revenue strategy (MTRS), and the adoption of the Tax Compliance Improvement Plan NBR staff compliance risk management units in customs and VAT wing.

Approximately 4,38,000 BIN holders had enrolled as of May 2023, according to sources, and fewer than 10,000 EFD machines had been set up by June.

At this point, the MTRS has not yet begun. However, the NBR exceeded the VAT attainment goal.

A delegation from the IMF requested information from the NBR about the status of these conditions prior to the budget's passage. However, due to budget-related confidentiality concerns, the NBR did not share it at that time.