Doulot Akter Mala

The International Monetary Fund (IMF) Monday expressed its deep concern over sluggish import of capital machinery that reflected bleak investment scenario in the country, revenue board officials said.

A two-member delegation, lead by its resident representative in Dhaka Jonathan C. Dunn, expressed such view in a meeting with the customs wing of the revenue board.

Import order of capital machinery dropped by 30 per cent in the last fiscal due to slow growth in the industrial sector.

The IMF team held a series of meetings with the customs, value added tax (VAT) and income tax department. It also held a meeting with the central intelligence cell of NBR to discuss about its expansion and capacity strengthening.

"The IMF team expressed its discontent on plummeting import of capital machinery," a senior revenue board official told the FE after attending a meeting with IMF.

This is because of sluggish trend in investment and industrial expansion as the country is unable to ensure supply of adequate gas and power for industrial units, he said.

The IMF also agreed with the reasons that caused downward trend of capital machinery import, he added.

In a meeting with the VAT department, the IMF team stressed the need for expansion of the department and recruitment of adequate manpower.

The IMF team also expressed its dissatisfaction over delay in merging the income tax and value added tax (VAT) for Large Taxpayers Units (LTUs).

The IMF has long been recommending for merging the two units to ensure exchange of information that would check tax evasion but the government is yet to take the move.

"We have made it clear that both the units have already started exchanging information regarding payment of income tax and Vat before merger," said a senior income tax official.

LTUs are the brainchild of IMF established to enhance revenue collection by closely monitoring the large taxpayers.

In a meeting with income tax department, the IMF team has expressed its satisfaction over the impressive growth of income tax department in the first quarter.

"The IMF has discussed about the fate of its proposed new income tax policy that was placed in the board earlier," said a senior income tax official.

The income tax department has said that the government is unable to introduce the new policy as it contradicts with the current context of the country, the official said.

The IMF also discussed about the issues relating to tax exemption and expansion of income tax wing, he added.