Non-tax revenue must be deposited to govt examiner on collection day

Finance ministry says the move aims at curbing corruption and ensuring timely revenue collection

The Ministry of Finance has introduced a new rule, mandating that all non-tax revenue and non-NBR revenue collected by government agencies must be deposited to the government treasury on the same day it is received.

The move, aimed at curbing corruption and ensuring timely revenue collection, was announced in a circular issued by the Finance Division yesterday.

The finance ministry instructed that any revenue collected after office hours or on public holidays must be deposited to the government exchequer the following day. Delay in depositing the collected revenue without any valid reason will result in actions, the ministry said.

Besides, ministries, departments, offices, and agencies have been instructed to increase the fees and charges for various government services every three years.

Experts welcome the move

Experts have stated that the new initiative will play an effective role in curbing irregularities reported in collection of non-tax and non-NBR revenues.

Mahbub Ahmed, a former finance secretary, told TBS that it has long been discussed that there are opportunities to increase revenues from sources beyond the National Board of Revenue (NBR).

“In many areas, the rates or service charges are minimal, while there are also weaknesses in various sectors,” he said.

Masrur Reaz, chairman of Policy Exchange Bangladesh, noted that the economy has grown and diversified with more government services, leading to new types of activities and a widening scope for more revenues.

“In many cases, the service charges or fees were established many years ago,” he said, suggesting that instead of updating the fees every three years, they could be reviewed and adjusted annually.

Govt eyes increased revenue collection

The Finance Division circular states that there is potential for increased revenues from non-tax and non-NBR sources. To achieve this, appropriate targets must be set for additional tax collection from non-tax and non-NBR sectors, including the imposition of rational fees and taxes, accurate identification of relevant sectors, and the regular collection of the government’s due interest and dividends.

It also states that the directive aims to ensure the proper distribution, collection, and management of resources.

A senior official from the Finance Division suggested that all agencies must set tax and service charges reasonably. “Many agencies are proposing to increase taxes or service fees, but there is no clear explanation as to why they are doing so. They merely state that it hasn’t increased for many years, which is not a valid argument,” he said.

“The government is not there to make a profit; rather, service charges will be determined based on cost,” the official pointed out.

In the national budget for the fiscal 2024-25, the government set a target of collecting Tk15,000 crore from non-NBR taxes and Tk46,000 crore from non-tax revenue.

Revenue collection in the country is significantly lower, forcing the government to borrow from both domestic and foreign sources to meet the budget deficit.

One of the conditions of the International Monetary Fund (IMF) loan is to increase revenue collection.

Finance Division officials said various issues related to the collection of non-tax revenue and non-NBR revenue and their deposit into government accounts. Many institutions have not been depositing funds for years, with some spending the collected money instead, they said.

“From now on, these matters will also be regularly monitored. Meanwhile, the Ministry of Finance will create a database of fees and charges for government services,” an official said.

Non-tax revenue and non-NBR revenue

Non-tax revenue includes interest from loans given to local governments, state-owned enterprises, and government employees. Additionally, it encompasses various administrative fees, the government’s share of net profits from autonomous, semi-autonomous, and statutory bodies, corporations, and state-owned companies.

Revenue generated from government services and products, leasing or renting out government land, mines, and other natural resources, royalties from the use of state-owned natural resources, tolls collected from roads and bridges, fines, and surplus funds from various institutions must be deposited into the government’s exchequer as non-tax revenue.

On the other hand, non-NBR revenue refers to taxes such as land development tax, narcotics and liquor duties, road tax, stamp duty, court fees, and motor vehicle taxes, among others.

Revenue target from various sectors

According to the information in the budget statement for the current financial year, the government expects to collect Tk500 crore from narcotics and liquor duty, Tk1,500 crore from motor vehicle taxes, Tk2,250 crore from land development tax, Tk10,000 crore from sales of stamps (non-judicial), and Tk750 crore from surcharges, including health development, environmental safety, and IT development surcharges as non-NBR revenue.

Besides, the government expects to collect Tk7,676 crore from dividends and profits, Tk6,114 crore from interest, Tk5,802 crore from administrative fees, Tk643 crore from fines, penalties, and forfeiture, Tk9,126 crore from service fees, Tk726 crore from rent and leases, Tk1,915 crore from tolls, Tk3,460 crore from non-commercial sales, Tk105 crore from capital receipts, and Tk10,433 crore from other sectors as non-tax revenue.