Govt bank borrowing ups as revenue earning slows

Al Amin :
The nationalised’s bank borrowing is increasing significantly as the revenue collection by the National Board of Revenue (NBR) is slowing down amid the economic strain caused by the global headwinds.
The government collects money from the people directly by borrowing from the scheduled banks and selling national saving certificates. But, it borrowed heavily from the Bangladesh Bank to realize the government expenditures.
The NBR collected Tk 79,622 crore in July-October of the current fiscal year (2022-23) with 14.17 per cent year-on-year growth. But, it requires to increase by 22.66 to achieve the annual target from the actual collection in FY22, according to a provisional data of the revenue board.
The NBR earned Tk 3,01,634 crore revenue last fiscal year against the target of Tk 3,30,000 crore.
On the other hand, the government borrowed Tk 22,862.68 crore from the central bank during the first four months (July-October) of current financial year, while it borrowed Tk 31,403 crore during the entire last fiscal year, according to the Bangladesh Bank data.
“The borrowing from the central bank means a one kind of printed money which is being injected into the market,” Dr Zahid Hussain, former lead economist of the World Bank’s Dhaka office, told The New Nation.
“The printed money crossed already the target. If the process continues, the elevated inflation will be contained massively in near future,” he added.
The NBR’s provisional data showed that slow growth in export-import and income and travel tax revenues in October. It also witnessed the negative growth in export and import stage
 revenue in September this year. The revenue board collected Tk 7,591 crore and Tk 7,481 crore from import and export revenue in September and October consecutively, growing negative 1.47 per cent and 5.6 per cent successively while the income tax and travel wing saw 7 per cent growth during September-October period this year.
The Value-Added Tax (VAT) wing exceeded its target for the last two months and it also experienced the comparatively healthy growth of around 16 per cent in September and October.
During the first four months of FY23, the NBR earned the highest revenue of Tk 34,184 crore from local VAT, followed by Tk 29,936 crore in import and export stage as well as Tk 26,780 crore from income and travel tax, while the targets were Tk 34,225 crore, Tk 34,739 crore, and Tk 28,342 crore respectively.
In July-October this year, the board witnessed 16 per cent growth in local VAT, 13 per cent in export and import stage and 12 per cent in income and travel tax while it had seen 14 per cent rise in local VAT, 21 per cent in export and import stage and 9 per cent in income and travel tax compared to the same period last year.
The NBR officials said that the revenue collection was affected due to the government’s austerity measures in releasing project funds and increasing letter of credit (LC) margins for luxurious products in the wake of dwindling forex reserves decreased imports, diminishing import and export revenues, they said.
The government project fund disbursement, they noted, terming it a big source of revenue and a downward trend in import due to dollar crunch is also causes of revenue fall in import stage.
During July-September the first quarter of FY23, import payment increased 11.7 per cent to $19.35 billion, compared to same period of previous year.
“Under invoicing and leakage may cause of revenue short fall in import and export stage,” Zahid Hussain.
“If the import payment decreases how the VAT does collection see a healthy growth, Hussain kept a question mark and adding the L/C settlement increased sharply in July-September period.