Tax receipt posts negative growth
NBR sees contraction for first time since independence as Covid-19 stings
Tax collection fell into negative territory in the just-concluded fiscal year due to, what officials described, economic disruptions caused by the Covid-19 pandemic.
Tax receipt by the National Board of Revenue or NBR shrank by 3.79 per cent in FY 2019-20, according to the provisional data.
This is the first contraction in revenue mobilisation since the country's independence from Pakistan in 1971.
The revenue board collected Tk 2.15 trillion in taxes against the Tk 3.0 trillion in revised target for the financial year just gone by. The original tax collection target was Tk 3.25 trillion in FY 2019-20, which was slashed to Tk 3.0 trillion later.
However, taxmen are upbeat on a rebound, saying revenue collection will pick up by end of this month when the authority hauls as a significant slice of value of added tax.
The chairman of the NBR, Abu Hena Md Rahmatul Muneem, had earlier predicted the slide in tax collection following the month-wise trend.
Of the three wings, the VAT wing collected a total of Tk816.3 billion, followed by income tax Tk 730 billion and customs Tk606 billion in the last fiscal.
The NBR's target for next fiscal year has been set at Tk 3.30 trillion.
In a letter to the finance ministry, the NBR chairman had hinted that taxmen would collect Tk2.50 trillion in FY 2020-21 in line with the growth that has averaged 14 per cent in the last five years.
The board collected Tk 2.23 trillion in 2018-19, preceded by Tk 2.02 trillion in 2017-18, Tk 1.71 trillion in 2016-17 and Tk 1.53 trillion in 2015-16, according to data from its research wing.
The NBR boss made it clear that his agency could hardly collect Tk 2.20 trillion in FY 2020, but that expectation even fell through.
The tax collection target for the current fiscal is 9.82 per cent higher than that of the revised target of Tk 3.0 trillion for FY 2020.
For the current fiscal, NBR's target for VAT collection has been set at Tk 1.28 trillion, followed by income tax at Tk 1.05 trillion and customs duty at Tk 956.52 billion.
However, the target for income tax collection has been lowered by Tk 12.04 billion, for the first time, for the current fiscal, down from the revised goal of Tk 1.06 trillion.
The negative growth in tax collection started from the month of May, manifesting the onslaught of the pandemic.
Officials said the COVID-19-induced lockdown has eaten into revenue for the last quarter of the fiscal, which is considered pick time for collection.
In FY 2019, the NBR had achieved 11 per cent growth and it could increase to 13 to 14 per cent this year had the situation remained normal, officials said.
Immediate past chairman of the NBR Md Mosharraf Hossain Bhuiyan said such a negative growth in revenue collection is "normal" given the situation.
"No one should be blamed for this. If the situation were normal the tax collection would have grown 11 to 12 per cent last year," he said.
He said the current fiscal year may also not see that much improvement in tax collection, despite the government's effort as business activities have yet to gain momentum, with the pandemic still raging the country.
Unless the situation improves by September, the tax collection may not see the double-digit growth, he added.