2 years ago

Bangladesh govt's tax collection rises 14.22pc in July-Dec period

Illustrative photo
Illustrative photo

Published :

Updated :

Tax-revenue collection grew 14.22 per cent, year on year, in the first six months of the current fiscal year but the amount stood Tk 170.81 billion short of the half-yearly target.

The National Board of Revenue (NBR) achieved 88.08 per cent of its target or Tk 1.26 trillion in the July-December period of the current FY thanks to hefty growth in import-stage revenues to compensate for a bit subdued economic activity in recovery stage.

Hike in global commodity prices -- in economic fallout from production and supply-chain disruptions by the coronavirus pandemic -- helped the government revenue collector like a blessing in disguise in collecting higher taxes from imports.

Board's customs wing achieved 19.50-per cent growth over the corresponding period last year followed by income tax 15 per cent.

Final data of VAT or value-added tax collection would be available after 20th of January when businesses will submit their VAT returns.

In the provisional data, the VAT wing achieved 9.54 per cent growth that would go up by end of the month.

However, the volume of VAT collection is higher than that of other two wings as usual in H1.

The NBR collected Tk 465.85 billion VAT, Tk 394.21 billion income tax and Tk 402.02 billion import and export duty in the July-December period.

However, the customs wing faced a Tk 70.95-billion shortfall against its target followed by the VAT wing Tk 58.94 billion and income tax Tk 40.91 billion.

The government has set a Tk 3.30-trillion target for the NBR for the current FY. For the first half of the tax year, the revenue target was Tk 1.43 trillion.

According to data of the research and statistics wing of the NBR, average revenue-collection growth was above 14 per cent.

Dr Ahsan H Mansur, Executive Director of the Policy Research Institute (PRI), finds the 14-per cent growth a normal or ordinary in respect to growth in import and overall economic rebound.

He says the trend shows that revenue collection may not reach Tk 3.0 trillion by the yearend.

"Overhauling direct-tax structure is required to achieve 25 to 30- per cent tax-collection growth," he suggests.

He thinks automated system can ensure transparency in tax system and reduce underhand dealings for tax evasion.

The NBR achieved 7.39-per cent and 6.39-per cent growth in revenue collection in corresponding period last two years respectively.

A senior tax official, preferring anonymity, said tax collection would go up this year compared to last FY's as financial health of large corporate houses is impressive.

He said accounting transparency would be ensured this year too as the taxmen would accept only Document Verification System (DVS)-verified financial reports of the corporate taxpayers as per a Memorandum of Understanding signed with the Institute of Charted Accountants of Bangladesh (ICAB).

The tax official mentioned that last year the black money- whitening scheme contributed a significant amount of direct taxes to the public exchequer, which may not come this year.

He, however, hopes upward adjustment in source tax would generate a significant amount of revenue if it is monitored by the taxmen properly.

The tax official noted that many of the corporate taxpayers refrained from depositing the source taxes that they deducted from the taxpayers.

"There is a misconception over automatic collection of source taxes without any effort of tax officials, which is completely wrong and discouraging for us," he says.

[email protected]

Share this news