Saturday, 27 November, 2021

Revenue collection returns to pre-Covid level in Q1

  • Staff Correspondent
  • 26 October, 2021 12:00 AM
  • Print news

The government’s domestic resource mobilisation has returned to its pre-Covid-19 level in the first quarter of the current fiscal year as the local economy is showing signs of recovery.

Revenue collection saw a 17 per cent year-on-year rise to Tk 583.51 billion during the July-September period from Tk 499.91 billion a year earlier, latest National Board of Revenue (NBR) data showed.

This growth was five times higher than the 3.21 per cent revenue growth posted in the first quarter of the last fiscal year.

Economic analysts think that it is a good sign for the local economy as the rise in revenue collection indicates economic recovery. 

The rising trend in tax collection is seen from the very beginning of FY22 and the collection was higher in September than that in August.

With the signs of economic recovery from the Corona crisis, exports-imports surged in the country, which has been reflected in the rise in revenue collection, according to NBR officials.

Revenue growth was in the negative territory in the 2019-20 fiscal year after the first Covid-19 onslaught in the country, which has never happened in the country’s history after independence.

NBR revenues also remained sluggish in April and May last year as the impacts of the corona crisis continued. Even June month’s collection was low last year. 

Tax collection started becoming normal from July last year and it returned to the pre-crisis level from the very outset of the current fiscal year.

Tax revenue collection in all the three broad categories-Value Added Tax (VAT), import duty and income tax—witnessed double-digit growth in the first quarter of FY22 whereas their growth was single-digit a year earlier.  

Imports are leading the revenue collection growth as import duties growth at a rate of 21 per cent in the first three months, which was only 7 per cent a year earlier.

NBR statistics show that import duties totalled Tk 193.09 billion in the first quarter, which was Tk 159.58 billion one year ago.

The central bank says that imports have surged in the country as domestic demands have risen after improvement in the corona situation. Spike in global prices of the imported items also helps better import duty collection.   

Value Added Tax (VAT) collection was in the second position with 16 per cent growth to Tk 210.92 billion during the July-September period. One year ago, VAT collection stood at Tk 181.12 billion with 1.25 per cent growth.    

VAT collection increased from August when business activities rose in the country after movement restrictions were lifted last month, NBR officials said.    

Direct tax collection, on the other hand, remained somewhat behind as income tax collection grew at a slower pace of 13 per cent to Tk 179.49 billion.

In the same period a year earlier, total income tax collection was Tk 159.20 billion with around 2 per cent year-on-year growth.  Despite the growth, NBR undershot its periodical target by a margin of over Tk 60 billion.

NBR provides 86 per cent of resources to the national budget. For the FY22 budget, NBR revenues have been estimated at Tk 3.30 trillion, up from last fiscal’s total collection of Tk 2.59 trillion.