Top ten tax-contributing items fail revenue targets

Import-revenue collection from top ten tax-contributing items declined 10 per cent in the first half of the FY 2025 compared with that of the corresponding period of the previous fiscal, casting pressure on the public exchequer, officials said.

From the ten items, the National Board of Revenue collected Tk 121.65 billion worth of revenue in the July-December period against Tk 135.50 billion in the corresponding period of last year, customs data revealed.

Economists say the decline reflects a slowdown in overall economic activities, including in agriculture, transportation, power production and so.

With the decline, the government received Tk 13.85 billion less in revenue alone from those items that include high-speed diesel, furnace oil, sugar, cement clinker, coal, bitumen and palm oil.

High-speed diesel import declined 29 per cent in volume while revenue collection dropped by Tk 6.04 billion or 23 per cent alone from the fuel largely used in agriculture and commercial transportation, NBR data showed.

Import of sugar also declined 29 per cent per tonne while furnace oil 7.0 per cent, cement clinker by 4.0 per cent, bitumen by 19 per cent, palm oil 25 per cent.

Tax collection from sugar imports declined 28 per cent. Import tax from palm oil squeezed 31 per cent. The NBR has offered tax waivers to tame local prices which led to the fall in customs revenues.

However, import of steel sheet, apple and orange increased by 2.0 per cent, 11 per cent and 15 per cent respectively.

Import of steel sheets increased by 15,986 tonnes in the July-December period compared to the corresponding period of last year.

In the first six months of the fiscal year, import of apple increased by 1,326 tonnes while orange by 6,762 tonnes.

Dr Masrur Reaz, Chairman and founder of the Policy Exchange Bangladesh, cites three reasons for the drop in top revenue-generating items' imports, including cuts in consumption under inflationary pressure.

Import of HSD declined due to drop in the power generation by power plants as many cannot import fuels due to fund crunch and stuck-up revenue lying with the government as bills, he says.

Consumption of bitumen is linked to the cut in country's Annual Development Programme (ADP) to trim the excessive and unnecessary projects, he adds.

The implementation of the ADP in the first six months of the current fiscal year stood at 17.97 per cent - the lowest on record-as the post-uprising interim government struggles to make two ends meet.

"Overall pace of the economy has slowed down, reflecting the decline in import and consumption of the major import items," says the economist.

Also, different government restrictions on import of goods can be cited as another reason, he adds.

On increase in apple and orange imports, Dr Reaz says it is a reflection on growing income inequality as economic hardship has impacted well-off sections' consumption lesser than poor and middle-income groups'.

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