Big jump in VAT collection in July

Staff Reporter :

The country witnessed a big jump in Value-Added Tax (VAT) collection in July, first month of the current fiscal year (2023-24), thanks to higher inflation and close monitoring by the VAT officials.
Although the healthy growth in the indirect tax collection, the National Board of Revenue (NBR) has failed to attain the monthly revenue earning target in the last month.
Experts said it was expected that the NBR would not be able to reach target as the government has set an ambitious target amid the slowed economic activities caused by Russia-Ukraine war.
According to the provisional data of the NBR, the revenue board managed to collect Tk 20,561.45 crore registering a 15.38 per cent year-on-year growth against the monthly target of Tk 22,427.05 crore in the last month.
VAT collection grew by 21.51 per cent in July compared to that of the corresponding month last fiscal year, the data showed.
However, the aggregate tax revenue collection in the month fell short of its target by Tk 1,865 crore. The NBR fetched Tk 20,561 crore as taxes in July against its target of Tk 22,427 crore.
Its three wings missed their targets in the month.
Among the wings, the shortfall in income tax collection was the highest at Tk 2,067 crore, followed by VAT Tk 329 crore, and customs Tk 531 crore.
Income tax collection grew by 9.65 per cent, while that of import-export by 13.70 per cent during aforesaid month.
The VAT wing collected revenue worth Tk 7,654 crore in July, followed by the customs wing Tk 7,693 crore, and the income tax wing Tk 5,213 crore.
Meanwhile, the National Board of Revenue (NBR) on Monday directed to install electronic fiscal device (EFD) machines in different business establishments in Dhaka and Chattogram regions primarily to collect VAT and Supplementary Duty in more transparent way.
A private firm Genex Infosys Limited will oversee the implementation of this system and will install the devices without any cost. As per the agreement, the company will install 60,000 EFDMS machines in the two regions during the current fiscal
year (2023-24) and three lakh in next five years. VAT currently accounts for nearly 40 per cent of the country’s total revenue. The EFDMS implementation mandate encompasses twenty-five sectors, including departmental stores, wholesalers, and hospitality establishments.
The government has set Tk 430,000 crore revenue collection target for FY24. Average revenue collection growth was 10.64 per cent during the last five years.
The NBR achieved 10.19 per cent growth in tax revenue collection in July of FY 23 over the corresponding period of the previous year.
Growth of the customs wing was 3.7 per cent, the VAT wing 15.68 per cent, and the income tax wing 10.03 per cent during the FY.