The government has cranked up its collection ambitions from direct tax in the upcoming fiscal year in a bid to lessen dependence on indirect taxes such as sales tax and VAT.

Direct tax comprises income tax, corporate tax and travel tax, and the National Board of Revenue has been tasked to collect Tk 57,500 crore via this channel in fiscal 2014-15, which is 38.4 percent of the total revenue target and an increase of 29.6 percent over current year's target.

While some economists welcomed the move on grounds that it would help establish a more equitable society, others expressed reservations about the feasibility of the target.

"It is the right approach as it is more equitable. It presents the opportunity to impose higher taxes on the wealthy and re-distribute the amount to the low-income group through expenditure," said Ahsan H Mansur, executive director of Policy Research Institute.

Meeting the collection target though would depend on a boost in economic activities and investment, he added.

"I do not see any major leap in economic activities and investment in the next fiscal year, essential to help revenue receipts grow fast," AB Mirza Azizul Islam, a former adviser to a caretaker government, said.

The government is aiming to collect 54 percent of the Tk 57,500 crore target from corporate taxpayers.

And to ensure collection, it has kept the tax rate for financial institutions, listed companies, mobile phone operators and cigarette manufacturers unchanged, as companies from these sectors provide more than Tk 10,000 crore or nearly one-third of the revenue. But the government has proposed reduction in tax rate for non-listed companies and gross turnover tax in an attempt to get firms to pay taxes and lure in foreign investors. At present, a large section of non-listed companies report losses or show lower profits to avoid tax, according to taxmen.

It has also offered tax cuts for exporting sectors including the garment industry, which did not go down well with certain sections.

Mansur said: "Garment factory owners are super-wealthy. Why will we tax others by excluding garment owners? Every sector suffered for political instability, so why should the garment makers alone get high

tax benefits?"

Islam said the proposed tax measures indicate that the brunt of the tax burden will be borne by individual taxpayers and not the corporate taxpayers.

Subsequently, it will not be possible for the NBR to ensure the jump in collections, he added.

Mansur went on to recommended increased vigilance to meet the direct tax collection.

However, to inspire people to pay taxes, the government will exclude those from being audited by the tax authority if they can show 20 percent higher income than the previous year.