Thursday, 18 August, 2022

Revenue collection falls behind target in 11 months

The National Board of Revenue (NBR) is struggling to achieve its revenue target, slowing the growth in tax collection and widening the deficit.

During the first 11 months of the just-concluded 2021-22 fiscal year, the tax regulator saw a revenue deficit of Tk 363.10 billion from its periodical target.

It managed to collect Tk 2.56 trillion (2,506.05 billion) in income tax, VAT and duties against the target of Tk 2.86 trillion (2,869.16 billion) set for the July-May period, the latest NBR data showed. 

Meanwhile, NBR’s annual revenue growth slipped to 13.87 percent from 17.34 percent a year earlier.  

NBR will have to collect over Tk 790 billion in June to achieve the yearly target of Tk 3.30 trillion, which does not seem to be achievable. 

“Three divisions of NBR could achieve an average 87.34 percent of the target. Customs division posted 92.35 percent performance, income tax division 90.03 percent performance and VAT division 81.49 percent,” an NBR official said seeking anonymity.

The official does not think that it is a very poor performance if the present global turmoil situation is taken into account.                 However, he also doubts whether the high targets set for FY23 can be achieved in the context of the volatile economic situation across the globe amid the ongoing Russia-Ukraine war. 

The customs division managed to collect Tk 804.86 billion in duty with 18.18 percent growth supported by increased import costs resulting from the war. The collection remained behind the target of Tk 871.50 billion.

The largest source of tax --VAT collection--posted the biggest deficit of Tk 210.86 billion. NBR collected Tk 928.33 billion VAT against nearly Tk 1.14 trillion targets set for the period.

Income tax and travel tax collection stood at Tk 772.86 billion with Tk 85.59 billion deficit.

Former NBR chairman Abdul Mazid does not think that revenue collection is directly linked to the global situation.

“Our revenue generation is not supposed to be directly linked to global realities, because import duties will rise if import costs surge at this crisis moment. But the exports may see some impacts, but it does not directly affect revenues,” he said.

He added that VAT collection was supposed to rise if people’s purchasing power could have been kept intact. 

He sees ample scope for revenue generation through expansion of the tax net, removing tax disparity and tax dodging. The NBR target is achievable if these issues are resolved, he noted.

The former NBR boss said the honest taxpayers feel discouraged when the tax dodgers are not brought to book.