Budget Revew of Bangladesh: Year 2011-2012

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2.0 Budget Profile
On the 7th of June, 2012 the 42nd budget of Bangladesh was announced by Mr. Abul Mal Abdul Muhith. The budget came into activation on the 1st of July, 2012. This is for the first time in the history of Bangladesh where the budget was not activated on the very day of the announcement. This is because some new duties and taxes were introduced that needed the sanction from the parliament and took some time in the bureaucratic process. The short profile of the budget is given below:

Table 1: Budget Profile
Sector| Allocation| In terms of Budget| In terms of GDP| Total Budget| 1,91738| x| 18.41%|
Total Income(with revenue and foreign aid)| 1,45,714| 76%| 13.99%| Revenue Earning | 1,39,670| 72.84%| 13.41%|
Foreign Aid| 6,044| 3.15%| 0.58%|
Annual Development Program (ADP)| 55,000| x| 5.28%|
Total Deficit (with Foreign Aid)| 46,024| 24%| 4.42%|
Total Deficit (without Foreign Aid)| 52,068| 27.15%| 5%| Financing| 46,024| | |
Foreign Loans| 12,540| 6.54%| 1.2%|
Domestic Loans| 33,484| 17.46%| 3.22%|
Total GDP| 10,41,360| | |
*The amounts are in crore Bangladeshi Taka

Assumptions
GDP Growth of 7.2%
Infalation Rate 7.5%

This was the view of the budget in short. We can see clearly that there is deficit which means the budget is not balanced. And we have 24% deficit which is an alarming factor. Now let us have a look at the budget Structure comparatively. Table 02: Budget Structure over the years

*Amounts are in crore Bangladeshi Taka
2.1 Budget Allocation and Sources
The whole financing procedure expected according to the Finance Minister of Bangladesh is providein in the following. Table 03: Financial sourcing
Source| Contribution|
NBR Tax| 58.50%|
Domest5icc Financing| 17.50%|
Non Tax Revenue| 11.90%|
Foreign Sources| 6.50%|
Foreign Aid| 3.20%|
Non NBR Taxes| 2.40%|

Figure 01: Sources of Financing (comparatively)

From the chart we can clearly see that the major source of financing is National Board of Revenue Taxes. NBR Taxes: The National Board of Revenue (NBR) is the central authority for tax administration in Bangladesh. Administratively, it is under the Internal Resources Division (IRD) of the Ministry of Finance (MoF). Negotiating tax treaties with foreign governments and participating in inter-ministerial deliberations on economic issues having a bearing on fiscal policies and tax administration are also NBR's responsibilities. The main responsibility of NBR is to mobilize domestic resources through collection of import duties and taxes, VAT and income tax for the government. Side by side with collection of taxes, facilitation of international trade through quick clearance of import and export cargoes has also emerged as a key role of NBR. Other responsibilities include administration of matters related to taxes, duties and other revenue related fees/charges and prevention of smuggling. Under the overall control of IRD, NBR administers the excise, VAT, customs and income-tax services. Domestic Financing: Domestic financing here means financing from local banks and other financial institutions. Non-Tax Revenue: It is a type of national and local governmental budgetary income. This includes revenue arising from state-owned enterprises and from the issue of bonds and paper money. Non-NBR Taxes: Non NBR taxes are the duties and taxes that are not managed by the National board of revenue. Foreign Aid and Foreign Sources are foreign contribution to our country and economy.

2.1.1 NBR Taxes
The sources of the NBR Taxes are given in the following.
Figure02: Specific sources of NBR Taxes

2.2 Budget Expenditure
The total sectors of expenditure for Budget of fiscal year (FY) 2012-2013 are presented graphicall in the following for comparative view. Figure 03: Total Expenditure (in percentage)

These are the total sectors and their allocation thereby. This is how the utilization of the...
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