The National Board of Revenue (NBR) has an uphill climb ahead when it comes to collecting approximately Tk90,000 crore as revenue in June to reach the target for FY23.
It is a monumental task as previous monthly averages for the revenue authority were between Tk2,500 crore and Tk3,000 crore in taxes.
Until May 2023, the revenue board had collected Tk280,000 crore in tax revenue - mainly from domestic VAT, according to provisional data available with the NBR.
The government set Tk370,000 crore as tax revenue-collection target for FY23.
However, revenue collection until May had come close to the volume of taxes collected in FY22 worth Tk287,000 crore.
The VAT wing of the NBR collected Tk108,000 crore followed by Income Tax wing Tk88,960 crore and customs duty Tk83,685 crore in the July-May period.
Target for income tax has been set at Tk122,000 crore while it is Tk136,000 crore for VAT and import taxes Tk111,000 crore in FY23.
NBR officials say the share of indirect taxes is gradually going down in the tax-revenue collection.
Import duty has declined to 28%-29% from earlier 45% while direct tax increased from 22% to 33%.
For the upcoming financial year, the Ministry of Finance (MoF) has set Tk430,000 crore as revenue-collection target for the NBR to play its prime part in financing an incremental Tk762,000 crore national budget of Bangladesh in keeping with the country's LDC graduation despite some economic setbacks caused by the pandemic and the Ukraine war.
Of the target, Tk154,000 crore is set to be collected by the direct-tax wing while Tk116,000 crore by the customs wing of the revenue board.
However, the highest quantum is earmarked to be mobilized by the value-added tax (VAT) wing, amounting to Tk159,000 crore.
Until April, Tk250,000 crore had been collected in revenue from domestic sources.
Of the amount, Tk98,015 crore came as VAT, Tk78,058 crore income tax and Tk74,222 crore import taxes.
The Centre for Policy Dialogue (CPD) estimates the shortfall at Tk75,000 crore while the Policy Research Institute (PRI) at Tk54,600 crore.
With the projected shortfalls in CPD and PRI calculations, the NBR will have to achieve over 32% growth in tax-revenue collection in the upcoming fiscal year to reach the Tk430,000 crore target.
Domestic tax-revenue collection had faced a shortfall worth Tk37,533 crore until April against its target.
In the July-April period, the NBR achieved 5.90% growth over the corresponding period last year, according to provisional data.
Revenue collection growth was 12% on average during the last five years.
