• Thursday, Nov 21, 2019
  • Last Update : 02:16 am

Revenue shortfall set to hit record high

  • Published at 10:01 pm June 12th, 2019
File photo of the National Board of Revenue (NBR) office in Dhaka Mehedi Hasan/Dhaka Tribune

Tk1,73,422crore collected in July-April; a 7.24% year-on-year growth  

The government is likely to face the highest ever revenue shortfall in the current fiscal as the National Board of Revenue (NBR) could collect only Tk1,73,422crore in July-April against Tk2,80,630crore revised target set for the fiscal.

The authorities will need to manage Tk1,07,208crore more in the last two months (May and June) of the fiscal year 2018-19 to meet the revised target, which means it needs Tk53,604crore per month.

Revenue officials said it was impossible for the NBR to collect such a high amount within such a short time and collecting Tk53,604crore per month was unprecedented.

“The revenue collection may stand at Tk2,20,000crore till the end of July, keeping a shortfall of about Tk60,000crore,” said an NBR senior official, seeking anonymity.

The recent trend of revenue collection also indicates that shortfall will hit the highest ever. 

The NBR collected Tk20,016crore and Tk19,945crore in March and April respectively, which were slightly higher from the average collection rate.

The exchequer collected Tk17,342crore on an average every month in the July-April period.

If the March-April trend continues, the NBR will be able to manage about Tk40,000 crore more till fiscal conclusion while the  shortfall will stand at Tk67,208 core, a 24% of the target. 

Earlier, in FY2017-18, the shortfall was the highest at Tk18,589crore, a 8.26% of the target. It was Tk13,344crore in FY2016-17, a 7.21% of the target.

However, FY2015-16 and 2014-15 had no shortfall and surpassed the target. 

In 2013-14 fiscal year the shortfall was Tk4,181crore, a 3.34% of the target, and Tk3,108crore, a 2.77% of the target, in previous fiscal. Besides, the revenue collection faced ups and downs.

But this is the first time that the government is going to face such as a huge shortfall. The first nine months of the current fiscal already counted Tk50,425 crore revenue shortfall, against a Tk203,845 crore target set for the July-March period.

However, though the revenue collection faced shortfall compared to fiscal target, it achieved 7.24% year-on-year growth.

The NBR collected highest Tk67,182 crore in revenues from value added tax (VAT), Tk53,164 crore from income tax and Tk53,080 crore from customs in the ten months while VAT witnessed 5.15% growth, customs 3.71% and income tax saw 14.27% year-on-year growth.

“Although our officials worked hard in the field, revenue target could not be met in the period,” NBR Chairman Md Mosharraf Hossain Bhuiyan told Dhaka Tribune last month.

He claimed that tendency to evade tax was the main cause behind the shortfall. 

Analysts have expressed their frustration over the revenue collection situation. 

“I am not optimistic at all about achieving the revenue target this year and a huge shortfall is going to happen,” said former adviser to a caretaker government AB Mirza Azizul Islam.  

Actually, every year the government imposes a high revenue target on NBR, which it eventually fails to achieve, he told Dhaka Tribune, adding that this year the scenario was the worst as the revenue growth rate was only 7.24%.

But it was at least 18-19% in the same period last year, he added.

As a result, the government had to borrow higher amounts from banks and saving tools, he said. 

Azizul suggested that the NBR be more active and ensure proper monitoring to protect tax from dodging.