Department of Urban and Regional Planning

Jahangirnagar University

URP 4103
Public and Municipal Finance

Submitted To
Dr. Md. Akter Mahmud
Professor,
Department of URP
Jahangirnagar Universitry

Submitted by
Shafiqul Hassan Shawon
Roll: 752
4th Year 1st Semester
Batch 22

Submission Date: 23/11/ 2023

Table of Contents
Questions.................................................................................................................................... 2
Answers...................................................................................................................................... 2
1 Sources of revenue of Bangladesh Government ............................................................. 2
1.1 Tax Revenue ................................................................................................................. 3
1.2 Non-Tax Revenue ........................................................................................................ 4
1.3 Capital Receipts and Grants ......................................................................................... 4
2 The process of implementation of a policy to space ....................................................... 5
3 Differences between Public goods and Private goods .................................................... 7
References .................................................................................................................................. 8

List of Figures
Figure 1 Source of Revenue (22-23).......................................................................................... 2
Figure 2 Type of Sources ........................................................................................................... 4
Figure 3 The process of implementation of a policy ................................................................ 5
Questions

1. Shortly describe the sources of revenue of Bangladesh Government

2. Draw a flow diagram to explain the process of implementation of a policy to space with
appropriate example
3. Differentiate Public goods and Private goods

Answers

1 Sources of revenue of Bangladesh Government

Government revenue, also known as national revenue, refers to the funds acquired by a
government through different sources. These funds are essential for supporting public
expenditure. Government revenue, along with government spending, constitutes integral
elements of the government budget and serves as crucial instruments in the implementation of
the government's fiscal policy. Governments employ a range of methods to generate revenue,
including taxes, fees, fines, and various other sources. The National Board of Revenue (NBR)
serves as the key authority for tax administration in Bangladesh, established by President's
Order No. 76 of 1972.
Government revenue main
sources are divided into various Source of Revenue
types and those are-
• Tax revenue
• Non-tax revenue
• Capital receipt
The total BDT 6.78 trillion
budget will be financed through
tax revenue from the National
Board of Revenue or NBR,
domestic loans, foreign loans or
grants, and other revenue
sources. Efficient administration
of revenue is vital for
governments to fulfill their fiscal
obligations and deliver essential
public services. Additionally,
governments must strike a Source: Ministry of Finance, Government
balance between revenue of Bangladesh (GoB)
Figure 1 Source of Revenue (22-23)
generation and expenditure

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requirements, considering economic conditions, public priorities, and policy objectives.
1.1 Tax Revenue
Tax revenue is the income derived from taxes on income, profits, social security contributions,
various levies on goods and services, payroll taxes, property ownership and transfer taxes, and
other imposed obligations. Taxes represent compulsory payments enforced by the government
on individuals, businesses, and entities. The revenue generated is utilized to fund diverse public
services, including education, healthcare, infrastructure, and defense. This serves as a primary
financial source for the government. Bangladesh faces challenges in raising revenue for its
development, surpassing comparable countries in the same income bracket globally. Key
categories of tax revenue in Bangladesh include:
1. NBR Tax Revenue
2. Non-NBR Tax Revenue

1. NBR Tax Revenue

The National Board of Revenue (NBR) is the highest authority for tax administration in
Bangladesh, established under President's Order No. 76 of 1972 by the country's founding
father, Bangabandhu Sheikh Mujibur Rahman. It operates under the Internal Resources
Division (IRD) of the Ministry of Finance (MoF) and is primarily responsible for collecting
tax revenues, including Value Added Tax (VAT), Customs Duty, Excise Duty, and Income Tax.
The ex-officio chairman is the secretary of the Internal Resources Division.
It has 4 Divisions, headed by 4 permanent Secretaries to the Government, namely,
• The Finance Division
• The Internal Resources Division (IRD),
• The Banking Division and
• The Economic Relations Division (ERD).
NBR collaborates with three tax-type wings: Customs Wing, VAT Wing, and Income Tax Wing,
along with two additional wings, IT Wing, and Research & Statistics Wing. NBR's tax revenue
is categorized into:
a) Direct Tax
b) Indirect Tax

a) Direct Tax
Direct taxes are imposed directly on individuals and entities by the government, targeting
income, profits, or wealth. Major types include income tax, wealth tax, corporate tax,
inheritance tax, and property tax. In Bangladesh, direct taxes comprise income tax and travel
tax.

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b) Indirect Tax
Indirect taxes are applied to goods and services, not directly on income or profits. These taxes
are paid indirectly through intermediaries, such as manufacturers, distributors, or retailers, with
the burden ultimately falling on end consumers. In Bangladesh, sources of indirect taxes
encompass import duty, VAT (import and domestic), supplementary duty (import and
domestic), regulatory duty, excise duty, turnover tax, and others.

Figure 2 Type of Sources

2. Non-NBR Tax Revenue

Non-NBR tax revenue refers to taxes and levies not administered or collected by the National
Board of Revenue. In Bangladesh, non-NBR tax sources include narcotics and liquor duty,
taxes on the use of goods, stamp duty, and other non-NBR taxes.

1.2 Non-Tax Revenue

This revenue category comprises the recurring income generated by the government from
sources other than taxes. Non-tax revenue may include fees, fines, charges for government
services, income from state-owned enterprises, grants, and donations. For instance,
governments may impose fees for licenses, permits, and various services. Non-tax revenue
diversifies the government's income streams and can supplement tax revenue. In Bangladesh,
non-tax revenue sources include interests, dividends, rent, administrative fees, sale of non-
financial assets, and other non-tax revenues.

1.3 Capital Receipts and Grants

In government financial management, capital receipts pertain to funds acquired through the
sale of assets, the incurrence of debt, or the receipt of non-recurring income sources. The
substantial avenue for obtaining capital receipts is through borrowing. Governments can secure
capital by borrowing from domestic or foreign financial institutions or by issuing bonds. This
borrowing process generates funds for capital expenses, such as constructing infrastructure and

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making other long-term investments. When governments embark on projects expected to yield
returns over time, they often opt to incur debt.
Grants and assistance from foreign governments or international organizations specifically
earmarked for capital projects are also considered capital receipts. These grants are typically
directed towards endeavors like the development of infrastructure or the expansion of specific
sectors. Additionally, funds recovered from businesses or individuals to whom the government
has lent money, and who subsequently repay the debt, are classified as capital receipts.
Domestic loans represent another notable source of government revenue.

2 The process of implementation of a policy to space

The implementation of national plans involves the adaptation and execution of strategies
aligned with the country's major goals. Our nation pursues development visions and missions,
leading to the initiation of various programs and projects. Notable strategies and plans include
the Delta Plan 2100, The Five-Year Plan, and the Perspective Plan 2041. These initiatives,
along with international and national commitments, contribute significantly to the fulfilment
of the nation's five-year plan objectives.

Figure 3 The process of implementation of a policy

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The Annual Development Program (ADP) plays a pivotal role, encompassing 40 ministries
with their own departments and subsections. Maximum of the government's development
budget is allocated through ADP. The Five-Year Plans provide a roadmap for long-term
economic and social development, guiding sectoral priorities such as agriculture, education,
health, infrastructure, and industry.
The ADP, functioning as a comprehensive plan, outlines development priorities and projects
for a fiscal year. It involves strategic planning and budgeting, allocating resources to various
sectors and projects based on development priorities and needs. The Medium-Term
Budgeting Framework, adopting a multi-year approach, links budget allocations with policies
and priorities, with periodic reviews ensuring alignment with changing circumstances.
Line ministries, responsible for project implementation within their sectors, play a crucial role
in translating policy objectives into actionable projects. They manage allocated budgets
efficiently, ensuring funds are used for intended purposes. Effective coordination among line
ministries is crucial to avoid resource or effort duplication.
Urban space allocation follows formulated policies and budget allocations, with specific funds
earmarked for urban development initiatives. These initiatives encompass land use planning,
infrastructure development, and the creation of sustainable urban spaces. Periodic reviews of
the Five-Year Plans assess progress and identify challenges, facilitating necessary adjustments
to align with changing circumstances.

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3 Differences between Public goods and Private goods

Public goods are items furnished by nature or the government without charge for the benefit of
the entire public. On the other hand, private goods are manufactured and sold by private
companies to fulfill the requirements and preferences of consumers. There are many
differences, which include-

Feature Private Goods Public Goods

Definition Goods that are both excludable Goods that are non-excludable and
and rivalrous in consumption. non-rivalrous in consumption.

Ownership Owned by individuals or Owned collectively by the

private entities. community or government.

Example Cars, clothing, food items. Street lighting, national defence,

public parks.
Excludability Easy to exclude individuals Difficult to exclude individuals from
from using the good. using the good.

Rivalry in Consumption by one person Consumption by one person does not

Consumption reduces availability to others. affect availability to others.

Market Provision Typically provided through the Often requires government or

market mechanism. collective provision.

Supply and Prices determined by supply May not have a direct market price;
Demand and demand in the market. often subsidized or funded by taxes.

Nature of Good Typically, tangible and Often intangible and indivisible.

divisible.
Exclusivity Applies - one person's use Does not fully apply - multiple users
Principle generally excludes others. can benefit simultaneously.

Profit Motive Often produced with the profit Profit may not be the primary
motive in mind. motivation for provision.

Regulation Subject to market regulations May require government

and competition. intervention for fair distribution.

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References

Bangladesh governments. (n.d.). Bangladesh government revenues.

https://tradingeconomics.com/bangladesh/government-revenues

Hayes, A. (2023, May 24). Revenue Definition, Formula, Calculation, and Examples.

Investopedia. https://www.investopedia.com/terms/r/revenue.asp

Issue-I, T. A. (2023, June 24). 2023-24 BUDGET: Current challenges. The Financial Express.

https://thefinancialexpress.com.bd/views/analysis/2023-24-budget-current-challenges

J, A. (2020, March 7). Public Goods Vs Private Goods - Difference and Comparison - The

Investors Book. The Investors Book. https://theinvestorsbook.com/public-goods-vs-

privategoods.html#google_vignette

Samuelson, P. A. (1954). The pure theory of public expenditure. Review of Economics and

Statistics, 36, 387-393.

Sandler, I., & Tschirhart, J. (1980). The economic theory of clubs. Journal of Public Economics,

14, 339-390

What is Revenue? Definition of Revenue, Revenue Meaning - The Economic Times. (n.d.).

The Economic Times. https://economictimes.indiatimes.com/definition/Revenue

Wing, L. A. (2023, January 2). Bangladesh’s National Budget 2022-23: Banking On Resilient

Business Output During Global Challenges [Part 1]. LightCastle Partners.

https://www.lightcastlebd.com/insights/2022/06/bangladeshs-national-budget-2022-

23-banking-on-resilient-business-output-during-global-challenges/

পরিকল্পনা রিভাগ. (n.d.). https://plandiv.gov.bd/site/files/bd4f359e-ce93-4d0c-bac5-

b36219aa8371/8th-Five-Year-Plan-(Bangla)

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