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NBR revenue growth loses steam in Sept

  • Staff Correspondent
  • 18 October, 2022 12:00 AM
  • Print news

National Board of Revenue (NBR) witnessed a slow-down in revenue collection in September after posting a strong growth in the first two months of FY2022-23.

Tightening grip on imports and people’s eroding purchasing power due to high inflation were the main reasons behind the slowing revenue growth, say the economic analysts.

In the months of July and August, the NBR posted a healthy 23 percent year-on-year growth in tax collection, which slipped to nearly 13 percent in the first quarter, the latest NBR data showed. 

During the July-September quarter in FY 2021-22, the NBR marked a revenue growth of 17 percent. 

NBR provisional data show that the board collected a revenue worth Tk 657.37 billion in the first quarter of FY23, which was 12.63 percent higher than the previous year’s collection of Tk 583.68 billion.

 The fall in import compared to that of August might have caused the decline in revenue collection growth, some NBR officials said.

Besides, people’s purchasing capacity also declined because of global energy and food price volatility, which has been reflected in slowing VAT collection.

For the ongoing FY 2022-23, total revenue collection target for the NBR has been set at Tk 3.70 trillion.

Economic analysts think that this target is “ambitious” and the NBR has to post 31 percent growth in revenue collection for the rest of the fiscal year to achieve the target.

But some NBR high officials think that they will be able to reach close to the target if the current trend in revenues continues for the rest of the year.

Import duty, value added tax (VAT) and income tax are the three sources of NBR’s revenues, in which VAT contributes 39 percent, income tax 37 and the rest of the money comes from import duty.

During the July-September quarter, NBR collected Tk 224.33 billion as import duty, which was 16.44 percent higher than Tk 192.66 billion collected in the first quarter of FY22.

But VAT collection growth shrank to 10 percent as NBR managed to collect Tk 232.15 billion from VAT against Tk 210.15 billion collection one year ago.

Besides, income tax grew by 11.5 percent to Tk 200.87 billion from Tk 180.07 billion a year earlier.

NBR provides 85 to 86 percent of resources for implementation of the national budget. A better revenue collection helps keep the government’s bank borrowing low.

Like most of the economic analysts, Dr. Ahsan H Mansur, executive director at Policy Research Institute (PRI), believes that revenue collection in Bangladesh is not      commensurate with its size of the economy.

“We’ve to step up revenue collection efforts further,” he said, suggesting special steps to spur NBR revenue mobilisation.  About the slowing growth in revenues, he said: “Production and sale have fallen in the local market. Demand in the economy has squeezed.”

He added that it is not a good sign for the economy because it would lower investment and employment.

As a whole, the tax regulator was able to mobilise only 8 percent of its yearly target in the first quarter. In FY 2021-22, it earned Tk 2.61 trillion in taxes.