Revenue shortfall may dent economy

Staff Reporter :
The revenue collection shortfall has increased to Tk 16.5 thousand crore in first five months (July-November) period of the current fiscal year, inviting multi-prong dangers for the country’s overall economy.

The officials of the National Board of Revenue (NBR) blamed the slowed economic activities in the country and the ongoing import restriction due to dollar shortage for the deficit.

According to the provisional data of the NBR, the public exchequer was able to collect Tk1,32,334 crore against the five-month target of Tk1,48,794 crore during the mentioned period, leaving a revenue shortfall worth Tk 16,459 crore.

The internal resource mobilization or revenue collection is the main source of financing for budget implementation. But the NBR is now struggling hard to bring pace in the major source due to the internal and external factors.

Economists said the revenue shortfall will increase pressure on the government as it will be forced to borrow from the banking system to meet the budget deficit, leaving a decline in credit facility to the private sector.

The increase in bank borrowing by the government will upend the inflation, which in turn will bring suffering to people’s lives, they added.

The government has set an ambitious revenue collection target of Tk 4.30 lakh crore for the current fiscal year and the NBR managed to achieve 31 per cent of the target so far.

Ahsan H Mansur, Executive Director of Policy Research Institute (PRI), told The New Nation, “The revenue collection target is unrealistic and ambitious. As a result, the shortfall is likely to be bigger at the end of the fiscal year.”

Increasing the internal resource mobalisation, a massive reform programme should be implemented, he added.

The provisional data showed that none of the three wings—customs, Value-Added Tax (VAT) and Income Tax–of the NBR have reached the five-month revenue collection target during the aforesaid period.

The Income Tax wing managed to collect Tk 39,384 crores against the target of Tk 45,496 posting Tk 6,111 crore deficits during the time.

On the other hand, the customs wing earned revenue worth Tk51,510 crore against its target of Tk56, 075 crore, leaving a revenue collection shortfall of Tk 4,564 crore during the five-month period.

Meanwhile, the VAT wing fetched Tk 41,439 crore against the target of Tk 47,222 crore, registering a deficit of Tk 5,782 crore during July-November period of the current fiscal year, according to the provisional data.

Economists said that the revenue collection target for the current fiscal year will not be achieved, if it is collected at this pace.

Besides, as per the loan conditions of the International Monetary Fund (IMF), there is pressure to collect additional revenue. So, the NBR may face a big shortfall in revenue collection due to political uncertainty including strikes and blockades.

In the last fiscal year, there was a shortfall of about Tk44,000 crore in revenue collection. It is feared that the deficit may be more this time.