The Financial Express

Poor receipts prompt govt to cut tax collection target

* Officials sceptic about achieving revised figure * Increased bank borrowing feared

Doulot Akter Mala | Published: May 21, 2019 09:25:42 | Updated: June 14, 2019 12:12:09

Govt revises down tax collection target

The government has revised the tax collection target downward to Tk 2.80 trillion for the current fiscal year following lacklustre trend in receipts, people familiar with the development said.

The original target for the tax revenue collection was set at Tk 2.96 trillion.

They said the target for all three wings has been revised so that the tax authority can achieve it.

At Tk 1.04 trillion, the VAT wing will chase the highest target, followed by the income tax wing at Tk 966.32 billion and customs wing Tk 794.25 billion.

The original revenue collection target for VAT, income tax and customs wing for FY 2018-19 were Tk 1.10 trillion, Tk 1.02 trillion and Tk 840 billion respectively.

The National Board of revenue (NBR) recently finalised the revision for its three wings as per the revised budget, framed by the ministry of finance.

But officials are doubtful about achieving the target even after its downward revision.

A senior NBR official said the tax officials would be able to mobilise a maximum Tk 2.25 trillion in the current fiscal.

He said the board has requested the government high-ups to slash the target to Tk 2.50 trillion, but the proposal got no backing.

Officials said the government wants to keep its budget deficit within 5.0 per cent of gross domestic product (GDP).

He said ambitious target, slow import in revenue-generating goods and a string of tax exemptions are responsible for the large shortfall in the first three quarters of the current fiscal.

According to the provisional figures, the taxmen mobilised Tk 1.53 trillion tax until March achieving a poor 7.11 per cent growth.

In the July-March period, the tax revenue collection shortfall stood at over half a trillion taka against its target.

Following the huge deficit, the NBR, on May 13, 2019, formed a five-member special committee to gear up revenue collection in May and June.

The committee comprises NBR's members of the income tax, customs and VAT wings.

Customs and VAT wing members of the committee will take necessary measures to realise taxes arrears, dispose pending court cases, resolve delayed tax payment, and settle cases through Alternative Dispute Resolution (ADR).

Income tax members will take steps to realise outstanding revenue through freezing bank accounts and increasing the certificate cases, if necessary.

The committee members will expedite the process of resolving cases of arrears and focus on ADR, appellate and tribunal and audit.

They will also ensure proper collection of withholding tax through monitoring.

The committee members will conduct physical visit at the field-level offices and submit weekly reports to the NBR chairman.

Former chairman of the NBR Dr Muhammad Abdul Majid said the board should come up with sector-wise analysis on revenue collection trend to explain the reason behind shortfall.

"The government should take into cognizance the state of the economy before it expects to get higher revenues," he added.

Last year, the revenue board attained 17 to 18 per cent growth in the first three quarters, he said.

He said tax collection from banking sector, one of the large sources of revenue collection, is sluggish in the current fiscal.

Dr Majid said the shortfall in revenue collection will leave enormous pressure on the economy.

The government's borrowing from the banking sector and through savings certificates as well as dependency on foreign aid will go up, he said.

In March and April, the government's borrowing from banking sector rose, which may increase further as money will be required for implementing the Annual Development Programme (ADP) in the last one and a half months.

According to the Bangladesh Bank data, some Tk 25.47 billion was borrowed from the banking sector in March and April with the net government borrowing reaching Tk 5.66 billion in FY19.


Share if you like