Dhaka, Jan 23, (V7N) - The International Monetary Fund (IMF) has delayed the release of the fourth installment of $64.5 million under Bangladesh's ongoing loan program by more than a month. Initially, the release was scheduled for February 5, but it has now been postponed to March 12, when the IMF's executive board is expected to review the proposal. If the board approves, the funds could be released shortly afterward, sources from the Ministry of Finance confirmed.
 
Under the IMF loan program, Bangladesh is required to meet specific conditions to receive each installment. For the fourth tranche, most conditions based on data from June have been met, except for one—tax collection. To assess progress on these conditions, a 13-member IMF delegation visited Dhaka on December 3. A senior official from the Ministry of Finance noted that the IMF emphasized increasing tax collection during the discussions.
 
The delegation pushed for a reduction in tax exemptions to raise revenue, along with an added condition to increase the tax-to-GDP ratio by an additional 0.2% each year. The government has been negotiating these conditions. In response, the government raised the value-added tax (VAT) and supplementary duties on more than 100 goods and services midway through the fiscal year, despite high inflation. This move, however, has sparked criticism from various quarters.
 
In response to concerns, the government has recently reduced additional taxes and duties on several items, including medicine, mobile phone services, restaurants, clothing, and sweets. As a result, there is now concern that the revenue target may not be met.
 
IMF officials from the local office have held meetings with representatives from the Ministry of Finance, the National Board of Revenue (NBR), and Bangladesh Bank to discuss ways to increase revenue. The government has promised to focus on faster tax collection and clearer policy actions to meet the targets.
 
Sources from the Ministry of Finance indicate that the delay in the fourth installment is primarily due to negotiations regarding tax collection targets. On December 19, IMF Mission Head Chris Papageorgiou had confirmed that the IMF had reached an agreement with the Bangladesh government on the release of the $645 million installment and agreed to increase the total loan amount to $5.3 billion under the current program.
 
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