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Despite a 14% growth in revenue collection by the National Board of Revenue (NBR) in the recently-concluded fiscal year 2021-22, the revised target was missed by Tk30,000 crore.
The collection target was Tk330,000 for FY22.
They collected more than Tk300,100 crore revenue from income tax, value added tax (VAT) and customs duty.
According to NBR data, revenue receipts for FY21 was Tk263,886 crore, which jumped to Tk300,100 crore, witnessing a 14% growth.
NBR officials, however, are viewing the realized amount as a positive sign, considering the state of the economy.
Muhammad Abdul Mazid, former chairman of NBR, however, said considering the overall economic situation of the last fiscal year, the growth rate is not bad.
He thinks that NBR is not being able to collect the amount of revenue that should be collected according to the size of the economy.
“A large number of taxable persons are outside the tax net, which is putting more pressure on those who are paying taxes regularly,” he said.
Although there is a huge shortfall in revenue collection, the government set a new target for FY23 is Tk370,000 crore, which many economists think is an overly-ambitious goal to achieve as NBR is already Tk30,000 crore short of its FY22 target.
Regarding the matter, former NBR chairman, Abdul Mazid further told Dhaka Tribune: “It seems that it will be challenging for the NBR to meet its revenue target for FY23. One of the main reasons for this is that earlier NBR officials used to set targets considering their own capabilities. As a result, they were very close to achieving the target but now a goal is set from the top which may not match the reality on the ground.”
“As a result, the deficit continues to grow and even in FY23, the revenue target has been set at 12% more than last year. At the end of the current fiscal year, there will be a revenue deficit of around Tk35,000-40,000 more than the target.”
To remedy this, this former head of the NBR suggested the government invest more money and support in the NBR.
“The government has to think differently about the revenue office modernization and the facilities of its staff, as they are the ones who bring money to run the state.”
AB Mirza Azizul Islam, economist and financial adviser to a caretaker government earlier said: “Although the target of the proposed budget for FY23 is acceptable, implementation will be difficult as there will be many challenges. In addition, as the pressure on NBR to collect large sums of revenue increases, so will the pressure on the people.”
In FY20, the revised target was Tk300,500 crore while the earnings were Tk216,451 crore.
In FY19, the revised target was Tk280,063 crore and the collection was Tk220,771 crore.
Ahsan H Mansur, executive director of the Policy Research Institute (PRI), said the revenue board would carry over the shortfall in the upcoming FY, as a modest target of Tk370,000 crore has been set for the next year.
Increase in import and its value contributed to the rise in revenue collection (this year).
Without proper reform initiatives, the revenue collection growth would not be more than 12-15% despite having potential, he opined.
The NBR extended time for submission of corporate tax returns, and withholding tax would be collected to a great extent from various development activities.
In the last five-six years, the government used to revise the original tax revenue collection target downward before the end of FY.
This year, the target remains unchanged, as the NBR expressed optimism to reach closer to the target with its intensified effort, he added.
Until May, import tax collection grew by 26.29%, income tax by 18%, and VAT by 10.30%.
(DT)
