Staff Reporter :
In the fiscal year 2023-24, the National Board of Revenue (NBR) aimed to collect Tk 4 lakh 30 thousand crores in revenue.
However, halfway through the year, their progress is lagging, with only around 38 percent of the annual target achieved in the first six months from July to December.
During this period, revenue collection amounted to Tk 1 lakh 65 thousand 630 crores.
The target set by NBR for this period was Tk 1 lakh 88 thousand 856 crores. None of the three major revenue categories – imports, VAT, and income tax – have met their targets in the past six months.
Income tax revenue collection faced the most significant shortfall, falling short by Tk 8,593 crores during this period.
VAT revenue also fell short by Tk 6,070 crores in the first half of the fiscal year.
Despite collecting Tk 64,737 crores through VAT, the target was Tk 70,808 crores. One of the primary hindrances to achieving the VAT revenue target is litigation issues.
According to NBR’s records, disputes related to Value Added Tax (VAT) account for a hold-up of Tk 24,641 crores, resulting in 10,301 filed cases.
Despite settling a significant number of cases each month, new cases continue to emerge.
Efforts by NBR to expedite case resolution, both through alternative dispute mechanisms and traditional appeals, have not significantly reduced the backlog.
The highest number of pending cases pertains to VAT certificates, totaling 3,559 cases and causing a government revenue blockade of Tk 264 crores.
An NBR official, speaking anonymously, highlighted that VAT has been in practice in the country since the 1990s, with its introduction as law in July 1991.
However, companies often try to avoid VAT payments, sometimes even avoiding legal routes to stall payments.
In January of the current year, 171 new VAT cases emerged, involving revenue of Tk 279 crore.
Despite disposing of 139 cases in the same month, resulting in a revenue loss of Tk 68 crore, until January 2024, a total of 590 cases have been disposed of, with a revenue loss of Tk 2,759 crore.
To address this issue, NBR plans to install Electronic Fiscal Devices (EFD) and Sales Data Controllers (SDC) machines across the country over the next five years.
This initiative aims to standardize VAT rates and increase revenue collection. Administrative reforms are also being emphasized to bolster VAT collection.
However, the challenge remains as companies often resort to various delaying tactics in VAT evasion cases. Abdul Mannan, former member of NBR’s VAT wing, highlighted that companies try to delay payments through legal processes, but ultimately face the obligation to pay the entire VAT amount along with penalties if they lose the case.
The NBR’s emphasis on technological solutions and administrative reforms underscores their determination to address the ongoing challenges in revenue collection and meet their targets in the coming fiscal years.
