Customs duty consists of 25% of the total revenue stream, while 35% comes from income/direct tax, and the remaining 40% from VAT
Customs duty, one of the three pillars of the tax revenue streams (the other two being income tax and VAT), was the lowest contributor to the state coffer in fiscal year 2020-21.
Customs duty consists of 25% of the total revenue stream, while 35% comes from income/direct tax, and the remaining 40% from value added tax (VAT.)
During FY21, the National Board of Revenue (NBR) collected a total of Tk77,000 crore, out of its target of Tk94,000 crore, leaving a deficit of Tk17,000 crore and 22.06% less than the revised target.
However, officials did not seem too worried about the customs revenue shortfall, as Covid-19 was the primary reason for it.
Abdus Salam Murshedy, president of Exporters Association of Bangladesh (EAB) and a former president of Bangladesh Garment Manufacturers and Exporters' Association (BGMEA), told Dhaka Tribune: "We have crossed the Covid-19 situation. We may have missed the revenue target, but it has increased from last fiscal year."
"However, I think the NBR needs to be more digital in terms of revenue collection in order to increase duty collection. If we can go for complete automation, that is, if the process of paying duty was simplified, the income will undoubtedly increase. Foreign investment will also increase," he also said.
"The challenge awaits us after our LDC graduation. Problems will arise if you do not have proper preparation for this. In this case, it is important to facilitate sector-based allocations and loan facilities in the government's plan for economic zones. As has been done for the leather industry, some potential sectors including IT, pharmaceuticals, furniture can be considered. That will definitely increase our export and import duties," Murshedy added.
AHM Ahsan, vice-chairman and CEO of Export Promotion Bureau (EPB), said at an event organized by the Dhaka Chamber of Commerce and Industry (DCCI) recently that a big challenge awaited the country.
For the sake of promoting their products, domestic entrepreneurs need to increase their marketing skills, he also said.
If it was possible to attract foreign investment through agreements without raising the issues of FTA and PTA, customs duty collection would increase further, Ahsan added.
According to the National Board of Revenue (NBR), they said that the figures were yet to be finalized, and will be done so very soon.
This will increase the actual figures from customs duty collection, they also said.
Meanwhile, according to the NBR, two-thirds of the customs duty collection at the import stage came through the Customs House in Chittagong.
They collected a total of Tk51,565 crore in the previous fiscal, which is Tk9,500 crore more than the previous FY20 fiscal.
The rest of the revenue has been collected from other custom houses and 35 customs stations.
Customs officials attributed the target deficit due to the shutdown induced by the Covid-19 pandemic.
However, in FY21, the custom duty collected was Tk16,500 crore higher than the FY19 fiscal's total collections.
In the first nine months of the just-ended fiscal year, half of the total target revenue was collected at the import stage.
The remaining half was collected in the last three months.
Although the second wave of the pandemic began earlier this year, the collection of duty has not decreased by much.
A total of Tk10,339 crore was collected in April this year, which subsequently increased in the next two months.
Of this, the amount collected in May increased to Tk13,280 crore.
In June, it increased further to Tk16,500 crore, which is the highest for a single month in the outgoing fiscal year.