Editorial

Meeting revenue target

Collection structure must be reformed
The target set for revenue collection in this year's budget -- a 16.7 per cent increase over the amount collected in the last fiscal year -- is both laudable and problematic. It is laudable in that the tax burden in Bangladesh has historically been low as a percentage of GDP, and if we wish to grow economically, then we must all be prepared to pay our fair share. It is problematic, however, in that few, if any, reforms in the collection structure have been contemplated that would indicate how such an ambitious target might be reached.

The principal obstacle to the collection of revenue is the collusion between tax collectors and tax cheats that enables the latter to pay only a fraction of what they owe. Until this problem is addressed, and concrete measures are put in place to ensure that assessments are fair and scrupulous, the government will never be able to reach its revenue collection targets. There will always remain those who will do everything they can in order to pay as little tax as possible. However, if such people do not have colluders within the collectorate to abet them, then it should be possible for the National Board of Revenue to collect the amounts due.

The institution of the position of tax ombudsman is a very positive step that can be expected to ensure that tax collection remains fair and impartial. We urge the government to quickly fill the position and to appoint a non-partisan ombudsman of such stature as to be above suspicion, and to empower and equip the department under him or her to ably fulfill its stated function.

However, the reforms must not end there. In addition to a tax ombudsmen who will ensure that assessment is equitable and even-handed, the government must bend its mind towards instituting further reforms to ensure that there is no corruption the tax collection process. It is a tall order, but there is hardly a more pressing need if the government is serious about meeting its revenue target.