The National Board of Revenue (NBR) will rationalise source tax as much as possible in the forthcoming budget, its chairman, Abdur Rahman Khan, announced on Monday (29 January).
Speaking at a roundtable discussion titled "Challenges and Prospects of Digital Transactions: VAT Increase Perspective," organised by Prothom Alo in Dhaka, he criticised the previous government’s tax policies, stating that the finance ministry had imposed 40% more source tax last year than the preceding one, which disproportionately pressured actual taxpayers.
"One section of the population bears the tax burden while others receive waivers—this will no longer be the case," he asserted.
Abdur Rahman Khan underscored that the impact of taxation is felt more by buyers than sellers.
"We collect VAT from multiple sources, such as manufacturing and tobacco. However, when people go to the market, they do not feel the presence of VAT, which in turn shifts the burden onto real taxpayers."
He likened taxpayers to hens, warning against overburdening them. "Taxpayers are our hens. If you try to take out all the eggs at once, the hen will die," he remarked.
Fiscal Adjustments and VAT Policies
Abdur Rahman Khan also revealed that the government has reduced duties on essential commodities, including rice, lentils, and oil, to ease financial pressure on low-income groups.
Regarding VAT policies, he stated, "A 10% VAT applies to branded products, while non-branded items are subject to 7%. This is not discriminatory; the rationale is that those purchasing branded goods have a higher purchasing power."
Revenue Target to Be Cut by Tk16,500cr
The NBR chairman further disclosed that the revenue target for the fiscal year 2024-25 is set to be reduced by Tk16,500 crore, reflecting adjustments in tax collection strategies.
During the event, business leaders urged the government to widen the tax net rather than increasing tax rates. In response, Khan assured that significant reforms would be introduced in the next budget but called for greater transparency among businesses.
"A major shift is coming, but for that, businesses must prioritise transparency. If taxes are imposed, they must be paid," he affirmed.
