The National Board of Revenue (NBR) has witnessed a steep fall in revenue collection in the immediate past 2019-20 fiscal mainly due to the disruption caused by the Covid-19 pandemic.
Along with the huge deficit, the growth was also negative, meaning that revenue collection in FY 20 was lower than FY 19.According to the provisional estimates of NBR, the total revenue deficit in FY20 year has exceeded Tk 850 billion. Revenue collection in FY 20 stood at Tk 2.15 trillion against the revised target of Tk 3.05 trillion. The amount is Tk 80 billion lower than Tk 2.23 trillion collected in FY 19.
The latest data show that in FY 20, NBR collected the highest Tk 816 billion from VAT, followed by Tk 732 billion from tax and Tk 606 billion from customs duty.
In FY 19, VAT revenue stood at Tk 876.1 billion, income tax at Tk 729 billion and customs duty Tk at 633.82 billion.
NBR will release final figures in a week, detailing sector-wise revenue collection data.
According to NBR, the only time Bangladesh witnessed such a fragile state in revenue collection was in the fiscal year 1975-76. Revenue growth went upwards since then until the immediate past FY 20 when revenue growth ended up in the negative territory.
The coronavirus outbreak has led to a collapse of the economy and a collapse in revenue collection. Revenue collection usually increases at the end of the financial year, especially in May and June. The government has borrowed a record amount from the banking system to meet its regular expenses due to declining revenue collection.Dr Ahsan H Mansoor, executive director of PRI, a private research firm, told the Daily Sun that major reforms are needed in the revenue system. The entire revenue department will have to be reformed in a new shape to meet the desirable revenue collection.
He feared that the government would be in big trouble if the revenue collection from internal resources doesn’t grow at an expected rate.