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Tax revenue collection misses target by Tk 571b

FE Report | Published: August 01, 2019 09:54:19 | Updated: August 01, 2019 15:42:49


Tax revenue collection posted an aggregate shortfall of Tk 571 billion in the fiscal year (FY) 2018-19 against its revised target, recording 10.7 per cent growth over the corresponding year.

The growth in revenue collection by the National Board of Revenue (NBR) was lowest in the last fiscal year compared to the last five fiscal years, since FY 2014-15.

In FY 2017-18, the NBR achieved 17.9 per cent growth in revenue collection, followed by 11.7 per cent in 2016-17, 13.2 per cent in 2015-16 and 12.3 per cent in 2014-15.

NBR Chairman Md Mosharraf Hossain Bhuiyan revealed the data on tax revenue collection for the FY 2018-19 at a press conference on Wednesday on the NBR premises in the city.

The revenue collection growth was 10.7 per cent in FY 2013-14 and FY 2008-09.

However, the amount of revenue collection increased more than four-fold in the last ten years.

In 2008-09, the NBR collected Tk 525.27 billion in revenue that rose to Tk 2.23 trillion in FY 2018-19.

Addressing the press conference, the NBR chief blamed a large number of exemptions and revenue remaining unpaid by different government entities for the poor growth in collection.

He said the NBR could have collected additional Tk 70 to 80 billion by realising the dues from the state-owned entities.

In the last fiscal the government revised the tax revenue collection target downward to Tk 2.80 trillion, from the original Tk 2.96 trillion. The collection target has been set at Tk 3.25 trillion for the current fiscal year.

The NBR will have to collect more than Tk 1.0 trillion in additional revenue in the current fiscal year.

The NBR chairman said it is a challenging task but the NBR is hopeful of gearing up the tax collection by taking different steps, including taxpayer survey, introduction of Electronic Fiscal Device (EFD) and expansion of the tax and VAT nets.

He said the NBR set a target to increase the number of tax returns to 10 million from the existing 2.2 million by 2021.

"As per my estimation, some 40 million people have capacity to pay tax and submit tax returns, but they are not coming under the tax net voluntarily," he said.

Through the taxpayers' survey, the NBR would bring 672,000 new taxpayers under the net.

NBR data said the board lost tax revenue worth Tk 187 billion in the last FY due to exemptions offered in different forms.

Also, around Tk 80 billion in tax revenue remained stuck up with state-owned agencies.

"We have received Tk 151.92 billion less in VAT from the gas, internet and other sectors due to offering exemptions," he said.

Last year, the NBR lost Tk 130 billion in VAT alone from the gas sector due to waiver of all taxes to make Liquefied Natural Gas (LNG)-blended gas affordable to the consumers, the NBR chairman said.

He said the income tax wing missed Tk 20 billion due to cut in the rate of source tax on export earnings by readymade garment and other sectors to 0.25 per cent from 1.0 per cent.

The VAT wing missed revenue worth Tk 7.20 billion from internet services after reduction of VAT to 5.0 per cent from 15 per cent.

The NBR also exempted taxes worth Tk 15.02 billion in customs duty on import of capital machinery, raw materials and other goods.

The NBR chairman said the pace of revenue collection was slower until December last year due to the national election then.

In the last FY, the NBR collected Tk 729 billion in income tax, Tk 876.10 billion in VAT and Tk 633.82 billion in customs duty with growth rates of 17.94 per cent, 11.33 per cent and 3.43 per cent respectively.

The NBR chairman said the NBR is set to get approval of the Prime Minister shortly to procure 0.1 million EFD.

Initially, the NBR would start with 10,000 EFD which will gradually increase.

Responding to a question, the NBR chairman said the reduced rate of tax at source on savings certificates would be effective from July 1, 2019.

However, investors who have already paid 10 per cent tax on their interest amount from the savings certificates will be able to adjust their tax paid.

The government recently cut the tax at source to 5.0 per cent from 10.0 per cent on interest amount from savings certificates for investments up to Tk 0.5 million.

However, a senior tax official said there was no scope to adjust the paid tax on savings certificates as it is a final settlement.

On abuse of the bonded warehouse facility, the NBR chairman said the board suspended licences of about 342 companies for abusing the facility.

doulot_akter@yahoo.com

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