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The Financial Express

Non-tax revenue posts negative growth in eight months to February

Target slashed to keep budget deficit to 5.0pc of GDP


| Updated: May 06, 2018 21:11:11


Internet photo used for illustrative purpose only Internet photo used for illustrative purpose only

The non-tax revenue dived even as the cumulative collection of domestic revenue grew 54.55 per cent to Tk 1.26 trillion in the eight months to February, the ministry of finance said.

Tax, non-tax and non-NBR revenue registered less than expected growth until February of fiscal year 2017-18, forcing the government to slash the target for the current year.

The finance ministry recently revised the original target for internal revenue collection downward to Tk 2.32 trillion from the original Tk 2.56 trillion.

Non-tax revenue collection posted a negative growth this year, witnessing a shortfall of Tk 3.0 billion against the last year's collection due to the government's "inadequate efforts" to tap the area.

Main sources of non-tax revenue collection are fees and other charges of the government and autonomous entities.

An analysis of the finance ministry said non-tax revenue contributed only 1.3 per cent of the country's Gross Domestic Product (GDP) last year.

In the first eight months of the current fiscal, the government collected Tk 150 billion in non-tax revenue against Tk 153.29 billion last year.

In the current fiscal, the total target of non-tax revenue has been revised downward to Tk 269 billion against Tk 311 billion.

However, the original target for non-tax revenue collection for the current fiscal year was lower than the target of the corresponding year.

In FY 2016-17, the target for non-tax revenue collection was Tk 323 billion, which was Tk 311 billion for this year.

Finance officials said the large shortfall in tax collection target by the National Board of Revenue (NBR) forced the government to downsize the target in a bid to keep the budget deficit to 5.0 per cent this year.

The NBR's revenue collection fell short of target by Tk 230 billion in the first three quarters of the current fiscal year.

However, non-NBR tax collection grew until February of  the fiscal year, compared to that of the same period last year. The collection of non-NBR tax, which includes narcotics, transport, land and non-judicial stamp, stood at Tk 48.71 billion in July-February period against Tk 36.98 billion in the corresponding period last year.

The sharp increase in land and transport tax collection contributed to the revenue collection growth of non-NBR tax.

Land tax collection grew to Tk 12.59 billion against Tk 4.72 billion in July-February period of the last year.

Transport tax collection also stood at Tk 10.56 billion, compared with Tk 9.16 billion a year ago.

Despite impressive growth in non-NBR tax collection, the finance ministry also cut its original target to Tk 75 billion from the original Tk 86.21 billion.

Officials said there was an initiative of the finance ministry to raise the non-tax revenue by increasing the fees of different departments including railway, postal, Bangladesh Telecommunication Regulatory commission (BTRC), Bangladesh Petroleum Corporation (BPC), the Department of Immigration and Passports, Law and Justice Division and Bangladesh Road Transport Authority (BRTA).

They said that NBR contributes around 85 per cent of the domestic revenue collection while the residual part comes from the non-tax revenue and non-NBR tax.

Last year, non-NBR tax contributed 0.4 per cent of the GDP, while non-tax revenue 1.3 per cent.

The total taxation to GDP ratio will be 11.7 per cent against the government's target 13 per cent.

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