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Revenue Collection In FY2018-19

Ambitious target


Published : 10 May 2019 09:13 PM | Updated : 05 Sep 2020 12:18 AM

Revenue earning in the first nine months of the current fiscal year has increased by 7.1 percent on a year-on-year basis but achieving the set target of Tk 2,96,201 crore in the fiscal is impossible. NBR sources said that even though they are trying their best to meet the target, it will not be possible for them to achieve the huge target.

According to official data, the NBR has already incurred a shortfall in revenue collection to the tune of Tk 50,400 crore in the July-March period this fiscal.
In the said period, the NBR could collect a total of Tk 1,53,420 crore against the target of Tk 2,03,845 crore. According to this calculation, the NBR will have to collect more Tk 1,42,781 crore in the remaining three months to fulfil the revenue target of Tk 2,96,201 crore set for the fiscal. This appears to be a herculean task for the revenue authority.

In the previous fiscal, FY2017-18, the NBR collected a total of Tk 206,415 crore, registering a 17 percent year-on-year growth. The NBR, however, could register only 7.1 percent year-on-year growth in revenue collection in the first nine months, this fiscal. If the revenue collection maintains such a sluggish trend, it will be a record in terms of lowest growth in revenue collection in the past two decades.

The NBR in FY1999-2000 recorded 1.73 percent year-on-year growth in revenue collection. In the last five years, the average revenue collection growth was 13.64 percent. Economists said the drastic fall in revenue collection this year indicates the fragility of NBR’s infrastructural capacity, though it was said in the past few years that the revenue board upgraded its capacity to streamline the revenue collection.

They also criticized the approach of setting revenue target having 40 percent growth rate, saying that it is quite impossible for NBR to achieve such a growthcompared to a year past. AB Mirza Azizul Islam, former finance adviser to caretaker government told Bangladesh Post that the sharp decline in revenue collection compared to last year is not a positive symptom. It only makes obvious the fragility of tax administration, he added.

“It was said in the last few years that NBR made infrastructural development but the fall down of revenue collection does not support the truth of these claims,” he said. A highly-placed NBR source told Bangladesh Post that recently a meeting was held at finance ministry where it was decided that the revenue target would be revised to Tk 280,000 crore from Tk 296,201 crore at the year-end.

However, NBR officials believe that the truncated target will also have to revise further as the exchequer has already faced a shortfall worth Tk 50,000 crore keeping three months left. “The shortfall will widen at the end of the fiscal”, they said adding that the growth rate of overall revenue collection, however, will increase at the year-end.

The customs wing of the NBR during the July-March period could collect a total of Tk 46,930 crore against the target, Tk 62,082 crore, registering only 3.22 percent year-on-year rise. However, during the same period in the last fiscal, this wing registered 15 percent year-on-year rise, which was top among the three revenue collecting wings.

VAT wing during the first nine months of the fiscal collected a total of Tk60,119 crore against the target, Tk 78,699 crore, securing 6 percent year-on-year growth. The income tax wing, in the current fiscal performed well as Tk 46,371 crore was collected during this period against the target, Tk 63,063 crore, registering 12 percent year-on-year rise.

A senior income tax official told this correspondent that due to a faster implementation rate of Annual Development Programme (ADP) this year, more income taxes were extracted from the bills of contractors, soaring the tax revenue. On the other hand, the NBR had to offer exemptions to many sectors at the beginning of the current fiscal, including RMG, LNG import, and telecommunication sectors, shrinking the VAT revenue.

A VAT official said that they will have to make a loss amounting to approximately Tk 10,000 crore only for offering exemption from petroleum sector. Besides, the government also offered different duty cut and incentives to different business sectors in the last budget, shrinking the overall revenue growth. The newly-appointed finance minister, A H M Mustafa Kamal, after assuming office vowed to make the exchequer vibrant to meet the revenue target. He also gave tax officials several instructions to modernize the exchequer and uplifting the revenue collection through all possible means. NBR sources said the development proceedings have already been undertaken in all tax wings to streamline the revenue collection.