The National Board of Revenue (NBR) may not reach its revenue target during the current fiscal due to political unrest and economic downtrend over the last few months, according to officials.
In the fiscal year 2012-13, NBR set a target of Tk1,122.59bn to collect as revenue. Of the target, Tk404bn was to come from value added tax, Tk356bn from customs duty and Tk353bn from income tax.
The Board’s provisional data suggests that Tk820.6bn revenue was collected during July-April period against the target of Tk870.25bn. According to the data, NBR would need to collect the additional Tk50bn in the remaining two months of the fiscal to meet the target.
“In the last few months, the revenue collection significantly fell due to political unrest and the resultant economic slowdown,” a high official of NBR told the Dhaka Tribune.
Custom duties also marked a downfall in recent months. In 2011-2012, the revenue board collected an additional Tk22.2bn on top of the target of Tk923.7bn.
“In custom duties, growth is now only 2.7%,” said the official.
He said since the volume of imports fell during the political instability in recent months, customs duty collection was less than projected.
The situation is likely to further worsen in June, the official hinted, without providing any details.
While the growth rate in collection of VAT and customs duty is slowing down the figures for income tax are impressive, making the officials hopeful to even exceed the provisional target.
More than Tk290bn was received from the income tax sector till April. “We have almost reached our target and are now expecting the total amount to exceed the target by Tk10bn”, said an income tax official.
NBR has been surpassing targets given to them for the last 3 fiscal years and this will be the first time in four years that they will miss the total revenue target.
The mindset in people during election time will also affect the collection target in the current fiscal, said Muhammad Abdul Mazid, former NBR chairman, to the Dhaka Tribune.
He said the failure might re-occur in the upcoming fiscal too, unless private sector investment improves, the implementation of ADP gets momentum and political stability is restored.
The total revenue earnings for the upcoming fiscal has been set at Tk1674bn. Of it, the NBR is to collect Tk1360.9bn, which is 11.4% of the gross domestic product.
The banking sector is a major source for corporate tax. But the transactions in the sector have slowed down due to political turmoil, which has consequently put an impact on revenue collection.
“The slowdown in banking transactions has also affected the revenue collection as it is a major source of corporate tax for the government,” said Abdul Mazid.
