Import restriction affects tax collection
Al Amin :
Import restriction and dollar crisis have affected revenue collection heavily as the earnings from customs duty and income tax posted a negative growth in last month (March) of the current fiscal year.
The National Board of Revenue (NBR) collected Tk 2,25,509.02 crore with 8.29 per cent year-on-year growth in the first nine month (July-March) period of the current fiscal year against the target of Tk 2,54,517.53 crore.
The revenue board fetched Tk 2,08,238.07 crore with 15.96 per cent year-on-year growth in the last fiscal year (2021-22), according to the provisional data of the NBR.
As per the data, the tax authority fetched Tk 8,182.27 crore with a negative growth 1.37 per cent from Customs department, Tk10,497.61 crore registering a 17.92 per cent growth from VAT wing and Tk12,322 crore with a negative growth 2.41 per cent from Income tax wing in March.
Dr M Masrur Reaz, Chairman of the Policy Exchange of Bangladesh, opined that imports have now gone down by around 25 per cent, which is a reason behind the revenue fall.
“Actually, the government earns revenues from development projects as Value-Added Tax (VAT) and other taxes on imports. But funding of many projects now remains suspended due to the ongoing fiscal pressure, which is impacting the internal resource mobilization severely,” he added.
On the other hand, tax collection from corporate firms has declined for increasing operational costs of the businesses due to the higher inflation, he said.
During the nine-month period of current FY, the revenue collection deficit widened to Tk 29,008.51 crore and the tax authority will have to collect over Tk 1.43 lakh crore in the next three months to meet the annual target of Tk3.70 lakh crore, which is quite impossible.
Following this, the government’s borrowing from banking sources increased to Tk 552.49 billion during the July-February period of the ongoing fiscal year, up by nearly 70 per cent from the same period in the previous year.
The country’s economic management might be fallen into challenge in coming days due to the slow pace in revenue collection, economists said.
On the other hand, if the expected pace of revenue collection is not met, it will be difficult to realize the condition of raising the tax-GDP ratio given by the International Monetary Fund (IMF), they added.
Increasing the revenue earnings in the remaining months of the fiscal year, NBR Chairman Abu Hena Md Rahmatul Muneem on Thursday instructed the officials to take effective steps including collecting due taxes from the government institutions and preventing tax evasion.
Dr Ahsan H Mansur, Executive Director of Policy Research Institute (PRI), said, “With the current pace of collection, revenue earning deficit may stand at Tk 40,000 crore at the end of the year.”
He also said that it will not be possible to increase 0.5 per cent tax-GDP ratio by present tax administrative structure as per the IMF’s condition.
The revenue board earned Tk67,380.34 crore registering 3.63 per cent growth from the customs wing, Tk86,901.46 crore with 15.41 per cent growth from VAT wing and Tk 71,227.22 crore with 4.87 per cent growth from Income tax wing in the nine-month period of the current fiscal year.
