NBR invites trouble after doctoring tax collection data

The National Board of Revenue (NBR) has run into trouble of setting increased tax collection target after "intentionally" cooking up last fiscal's receipt, people familiar with the situation said.

The board's tax collection growth target for the current fiscal year (FY 2017-18) shot up from the projected 35 per cent to 45 per cent, given the last fiscal's revenue collection Tk 1.85 trillion.

Last fiscal's tax collection data compiled by the NBR and Controller General of Accounts (CGA) office showed a gap of Tk 135 billion, according to officials.

The revenue board said the government's tax receipt was Tk 1.85 trillion in FY 2016-17, but the accounts office found the actual collection to be Tk 1.71 trillion.

The gap is 7.30 per cent of the revenue collection data, which the tax-collecting authority reported to the government showing an achievement in the revised target of revenue receipt.

The people familiar with the situation said that as revenue collection reflects the performance of the taxmen, some of the board offices "intentionally" doctored revenue collection figures with the help of large taxpayers.

The people said the gap between NBR and CGA data was widening almost every year.

The gap was only Tk 29.23 billion in fiscal 2010-11, which rose to Tk 126 billion in FY 2014-15.

In fiscal 2015-16, the gap declined to Tk 73.73 billion before jumping by two-fold in fiscal 2016-17.

The government high-ups sensed that some field-offices of the revenue board showed inflated tax collection data to take the credit of achieving higher growth in tax revenue collection, said the people.

The practice has left the revenue board in an awkward situation as its growth target of the current fiscal year went up to 45 per cent from the projected 35 per cent, given the last fiscal's revenue collection Tk 1.85 trillion.

To bridge the widening gap in figures, the revenue agency on Wednesday instructed all of its field income tax, customs and VAT offices to compile their respective tax revenue collection data from the circle offices again.

All of the commissioners will have to send reports with their respective revenue collection data of the fiscal 2016-17 within March 27 after proper scrutiny with the CGA offices.

They will also have to specify the reasons for mismatch in revenue collection data with the CGA office in the report, officials said.

Officials said NBR chairman Md Mosharroaf Hossain Bhuiyan, in a recent meeting, instructed the taxmen to verify the authenticity of the last fiscal's tax collection data.

He also asked the tax officials to furnish documents (main copy of treasury chalan or invoice) against their revenue collection data.

Tax officials said there were five main reasons behind the mismatch in data with the accounting office.

Showing the same chalan by different field-offices, requirement for sending provisional figures of collection, showing revenue collection without treasury chalan, showing double-data after receiving the chalan, and depositary of band roll tax of tobacco products in post offices instead of banks are among the reasons that resulted in mismatch.

To address the problems, tax officials have decided not to show revenue collection figures without specific account code and main treasury chalan.

They will also ensure collection of source tax through treasury chalan, verify the authenticity of treasury chalan online, expedite depository of income tax pay-orders in treasury chalan, and reconcile revenue collection data with the accounts office every month, officials said.

In the meeting, the board has decided to form a joint working group to bridge the revenue collection gap in the next meeting, where the finance division will be invited.

It will also hold a coordination meeting with the Finance Division and accounts office to get access to the Ibas (integrated budget and account system) method of CGA.

Officials said the NBR would ask for user identification and password to get access to the Ibas system.

Experts call for more interaction between the two state agencies to address the problem of data mismatch.

Towfiqul Islam Khan, a research fellow with the Dhaka-based think-tank Centre for Policy Dialogue (CPD), said that Ibas is more authentic than that of NBR's traditional method of compiling data.

"Both of the agencies should sit together to resolve the long-standing issue of data mismatch," he said.

The government prepares its budget plan on the basis of its resource and expenditure, so there must be accurate data of tax collection, he added.

The final figure of revenue collection could be known after auditing the data by the tax offices, he added.

He suggested speeding up the release of Ibas data by the finance division.

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