The LTUs formed the crux of the tax returns amid the Covid-19 pandemic
In spite of large taxpayer units (LTUs) paying a considerable amount of tax returns, the National Board of Revenue (NBR) failed to meet the revised target for fiscal year 2020-21 by Tk44,000 crore.
The LTUs formed the crux of the tax returns amid the Covid-19 pandemic, otherwise the figures would have looked even more bleak, said NBR officials.
According to NBR data, the LTUs helped exceed NBR's LTU target by realizing Tk24,011 crore at a growth of 15.22% in FY21, compared to the previous fiscal.
More than 50% of Tk93,000 crore in VAT came from 157 large companies.
It means that although overall VAT collection rose 10.82%, the collection from large taxpayers increased 15.22%.
NBR data also said that income tax growth of 14.11% was the highest in revenue collection, increasing the total collection to Tk85,000 crore against the target of Tk97,000 crore.
Officials at the income tax department said 86% of the money collected in income tax had been deemed as source tax, which was why income tax targets from individuals and institutions did not fall short.
Nevertheless, NBR chairman Abu Hena Md Rahmatul Muneem expressed his satisfaction regarding their success.
"As I said earlier, the rising demand in the economy and improved relationship with the taxpayers made our revenue collection successful. Moreover, it is our priority to stop that cat and mouse game between tax evaders and revenue collectors,” he told the Dhaka Tribune.
Economist AB Mirza Azizul Islam, a former adviser to the caretaker government, told Dhaka Tribune that due to the ongoing Covid-19 pandemic, small business entities suffered badly, but large companies continued to make profits.
This is why VAT collection from tobacco and mobile phone manufacturers, banks and large companies of consumer products went up, he also said.
The collection target NBR had set for FY21, as well as the upcoming one for FY22, remain impossible to achieve. NBR will never be able to achieve this, said the economist.
Though income of individual taxpayers slumped, large companies did not see a dent in their business amid the pandemic, and the revenue collector was successful in making them compliant, he added.
In the last fiscal year, the target of Tk96,000 crore has been achieved in the income tax sector, a 10.62% from the previous fiscal.