The IMF has asked the National Board of Revenue (NBR) to submit a plan targeting increased revenue collection for the current 2024-25 fiscal year.

The IMF (International Monetary Fund) has said that it wants to receive the plan by this month. The plan will be presented to the IMF’s Washington Board.

The matter was discussed in a meeting with the concerned officials of the NBR’s income tax, VAT and customs branches on Thursday (December 5). This information was revealed after talking to several NBR officials.

An NBR official, who did not want to be named, said that to collect revenue as per the new target, about Tk 12,000 crore more than before will have to be collected. The IMF has asked for a plan on how this additional money will be collected.

However, it is difficult for the income tax branch to remove any tax exemptions or increase tax rates in the current fiscal year, as these steps cannot be taken in the middle of the year.

Again, the official said that increasing the duty at the import level will directly impact inflation, indicating that the VAT branch may take some steps in this regard.

According to NBR data, revenue collection in the 2023-24 fiscal year was Tk 362,000 crore (as per IBAS calculations), which is 7.3 percent of GDP.

According to the IMF target, the revenue collection rate in the current fiscal year is expected to increase by 0.5 percent of GDP.

However, revenue collection has been declining in recent months. Collection from July to October was 1 percent lower than the same period of the previous fiscal year, or Tk 31,000 crore less than the target.

In this situation, the NBR considered reducing the target, but in Wednesday’s meeting, the target was further increased. This poses a major challenge for the NBR.

Economists believe that the new target is not realistic in the current reality.