National Board of Revenue is facing disruptions in tax collection due to continuous hartals and blockades across the country enforced by the 18-party opposition.
The situation has led to fears that the country may confront the biggest ever shortfall in internal revenue mobilisation, said official sources.
“Revenue collection is not good now,” NBR chairman Ghulam Hussain told the Dhaka Tribune.
A senior finance division official said such revenue fall would have impact on the progress of development works and budget deficit.
According to him, the widening of budget gap would eventually effect local inflation.
Ghulam Hossain said the revenue collection was Tk5,000 crore less than the target during July-November period.
The first quarter target of the current fiscal was set at Tk34,000 crore.
He said the NBR revenue target for the current fiscal may need to be revised to Tk125,000 crore from Tk136,000 crore.
An tax official projected around Tk120,000 crore could be collected in the fiscal should the situation improved.
But the tax collection target was unlikely to be achieved in such a situation, he said.
“The country’s overall economic growth largely relies on revenue collection.”
International Monetary Fund recently projected the growth of gross domestic product at 5.5% in the fiscal against the government’s target of 7.2%.
IMF projected the tax-to-GDP ratio of Bangladesh would remain flat at about 10.50% in the current fiscal year due to slowing economy amid hartal and ongoing back-to-back blockades for last couple of months.
“A slowing economy in hartal-related disruptions and political uncertainly contributed to lower than programmed tax revenue outturns for fiscal year 2012-2013,” said IMF report released recently on extended credit facility loans for Bangladesh.
“The tax revenues will be downward in relation to GDP despite these influences expected to unwind gradually,” it added.
The government set a target to achieve a tax-GDP ratio of 14.2% of GDP in the current fiscal year despite having the challenges of the political unrest and apparel factory collapse at Savar.
In current fiscal budget, expenditure is Tk222,000 crore or 18.7% of the GDP, planning to fetch Tk141,000 crore as tax revenue and Tk26,240 crore as non-tax revenue.
The overall budget deficit estimated at Tk55,030 crore or 4.6% of the GDP while the deficit financing met through foreign loans and domestic borrowings.
Annual Development Programe (ADP) dropped 9.28% year-on-year in the first four months of the fiscal year owing to slow progress of foreign-aided projects.
Moreover, it is for the first time in six years that the ADP implementation dropped from the same period of the previous year.
Between July and October, the government spent Tk9,960 crore in ADP, which was only 15% of the total allocation of Tk65,872 crore.
The ADP implementation during the same period of fiscal 2012-13 was Tk10,920 crore, which was 20% of the total allocation.
The implementation of government-funded projects, however, increased 0.97%, while foreign-aided projects plummeted 28.2%.
Besides, overall inflation rose by 0.12 percentage points to 7.03% in November from the previous month on the back of rising both food and non-food prices.
In November, food inflation accelerated 0.17 percentage points to 8.55%, which was 8.38% in October.
Non-food inflation also saw a rise of 0.06 percentage points to 5.08% in November from October’s 5.02%.