NBR fails to collect Tk50,425 cr revenue in nine months which is 24.73 pc lower from target
Zahid Hossain Biplob: The National Board of Revenue (NBR) has failed to collect revenue in the first nine months (July to March) of the ongoing fiscal 2018-19 due to institutional incapacity, delay in implementation of tax administration reforms and deferment of the implementation of new VAT law.
On the other hand, NBR officials said tax evasion was the major reason for shortfall of the target.
The government has set the revenue collection target amounting at Tk Tk203,845 crore but the NBR collected Tk Tk153,420 crore during this period. The revenue collection witnessed a Tk50,425 crore shortfall against its target.
According to the NBR provisional data, NBR collected Tk153,420 crore from the three sources including income tax, value added tax (VAT) and customs duty.
The amount collected in the nine months is 7.1 percent higher against Tk144,311 crore of the same period of previous year but 24.73 percent lower against the July-March target.
Md Mosharraf Hossain Bhuiyan told the Daily Industry that the officials worked sincerely in the field level but revenue target missed the target in the nine months..
He claimed that tendency to evade tax by people was the main cause behind the shortfall.
“Some dodge the taxes tactfully, for example, by putting their products on auction, not paying custom duties while importing,” he explained, adding that they (the unscrupulous) later buy these form auction.
Mosharraf, however, said NBR would make all efforts to fulfill the target till the fiscal year conclusion.
“We have taken the issue seriously and asked all officials concerned recently to try to boost up the collection to at least 15 per cent of the growth target”, he said. He laid emphasis on vigorous efforts to attain maximum results in the remaining three months; the official said adding evidently revenue collection gets faster by the year end.
The revenue collecting authorities has to earn more Tk127,210 crore by June, the fiscal’s concluding month, to fulfill the revised revenue target of Tk 280,630 crore for the whole fiscal.
The finance ministry revised the revenue target in April, only two month before the fiscal conclusion, and cut it down by Tk15,370 to Tk280,630crore, against the NBR demand to cut Tk50,000 crore from Tk296,000crore actual target.
Meanwhile in the July-March period, the NBR earned Tk46,371 crore from income tax keeping Tk16,692 shortfall from the target.
The exchequer has to earn Tk48,629crore income tax more within in the last three months to fulfill the whole fiscal’s target.
Besides, it has to earn Tk47,082 crore VAT more in April-June period of the current fiscal, while it colleceted Tk60,119 crore VAT in the first nine months.
VAT collection faced Tk18,580crore shortfall from the target, but witnessed 6.4% year-on-year growth.
Besides, NBR losses Tk15,152 crore in customs and excise duties against Tk62,082crore target set for the July-March period, and has to earn Tk31,070crore for by June.
A senior official of NBR said, seeking anonymity, the shortfall stood as the government fixed high revenue target for them.
Besides, he explained three reasons behind the shortfall including duty exemptions on the machineries imported for ongoing government’s mega projects, exemptions for LNG and other gas imports and not implementing VAT online.
“If the issues were not existed, we could fulfill the target,” he added.
Besides, the collection of some outstanding payments from other government agencies like the Bangladesh Petroleum Corporation could increase revenue earnings, the official said.
The pace of revenue collection may appear a big challenge for the new government in coming months in meeting the need of development expenditure as shortfall in collection by National Board of Revenue continues to widen every month, said experts.
They said that the government might have to cut revenue collection target to a significant extent, which would also put pressure on implementation of the annual development programme.
The deficit was much larger than that of the target while the growth rate was also very slow which would be a great challenge for the government. the government would be able to balance the situation as the rate of ADP implementation would also remain slower like previous years.
The government might also increase its borrowing from banking sector to meet the deficit in revenue collection which will put additional pressure on already slowed down private sector credit growth, they opined.