Tk 300b tax revenue deficit in FY '22

The tax revenue collection has faced nearly Tk 300 billion shortfall in the previous fiscal year (FY), 2021-22, although the tax-collecting wings have achieved double-digit growth over their previous year's collection.

According to a provisional data until Wednesday, the National Board of Revenue (NBR) collected nearly Tk 3.00 trillion taxes - achieving around 14 per cent growth over the previous FY.

In FY 22, the VAT wing collected Tk 1.08 trillion, while income tax Tk 1.02 trillion and customs Tk 894.24 billion. Targets for the three wings were Tk 1.28 trillion, Tk 1.05 trillion and Tk 956.52 billion respectively.

The income tax wing achieved the highest 20 per cent growth, followed by customs 15.91 per cent and VAT 11.89 per cent.

Tax officials said finally the tax collection growth rate may stand at nearly 16 per cent.

Economists termed the NBR's revenue collection performance impressive that would led to an increase the country's tax-GDP ratio.

"With the performance, the country's tax-GDP ratio has increased to above 11 per cent for the first time," said Dr Zaidi Sattar, chairman of the think-tank Policy Research Institute (PRI).

The country's tax-GDP ratio is set to increase by 1.0 per cent, if tax collection grows above 16 per cent.

Usually, target is set to increase tax-GDP ratio by 0.5 per cent every year, but last year would be an exception, he also said.

Dr Sattar noted that present macro-economic situation of Bangladesh is in strong recovery mode.

Import growth is 35-40 per cent overall, and 80 per cent of import is productive sector-oriented, including basic raw materials, intermediary goods and capital machinery, while 20 per cent is consumer goods, he added.

A senior official said the NBR's tax revenue amount would increase further, as some mismatch in the tax collection data compilation was found in the database.

He expected that the actual tax revenue collection may reach Tk 3.03 trillion after compilation of final data.

Officials said NBR Chairman Abu Hena Md Rahmatul Muneem asked the tax authority to compile data and reconcile it with the ibas++ of the Ministry of Finance (MoF) to avoid any mismatch in future.

In 2020-21, the tax revenue collection amount increased, after it was finally reconciled with the ibas++.

The NBR reported Tk 2.59 trillion tax revenue collection in the year-end that increased to Tk 2.63 trillion finally in the MoF data - as per calculation of the office of the Controller General of Accounts (CGA).

The government revises tax revenue collection target downward almost every year. This year is an exception, as the NBR team has expressed optimism to reach close to target.

Revenue collection target for the entity has been set at Tk 3.70 trillion in FY 2022-23.

The government has aimed to increase direct tax collection, so that it can constitute 50 per cent of the NBR's revenue.

NBR Income Tax (administration and human resource management) Member Shaheen Akhter said team effort of the taxmen along with guidance of the chairman contributed to the hefty growth last year.

Automation of tax deducted at source and electronic tax return filing using own resources and manpower of the NBR are also milestones.

Amid the Covid-19 pandemic challenges, the taxmen motivated the taxpayers to ensure voluntary compliance, she added.

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