Revenue deficit increasing
Country has faced revenue deficit of Tk 39,000 crore in the last seven months
G Mostafa: Though, the country’s economy has become momentum for a little bit centering the beginning of vaccination, pace has reduced in the VAT sector due to various complications and harassment to the traders causing reduction of VAT collection compared to the previous period. This is why, the revenue deficit is increasing day by day, said sources of National Board of Revenue (NBR).
Meanwhile, country has been faced revenue deficit of Tk 39,000 crore in the last seven months.
Sources said, Value Added Tax (VAT) has been considering as the main source of revenue income for the years. The National Board of Revenue (NBR) collects huge revenue through VAT.
The government has taken various steps to increase the scope of VAT, starting from enactment of VAT law.
But nothing is happening in this context. Allegations of harassment in VAT come up all the time.
Recently, a restaurant trader in the capital has set up EFD in his restaurant. Earlier, he carried his restaurant business after managing the concerned officials. Now, the officials have become angry for installing the EFD as their surplus income has been stopped.
Consequently, the trader is now being harassed in various ways. One such a businessman, who came to meet with the NBR chairman, talked with The Daily Industry and said, “I am running a restaurant business with my two friends, who live in abroad. I have been facing harassment by some officials. Now I want the intervention of chairman to get rid from the harassment.”
This situation is not only in Dhaka, but also outside the capital. They do not want to open their mouths in fear of harassment.
Seeking anonymity, a businessman said, “The concerned department of Rangpur Commissionerate fined him Tk 1.20 lakh for failure of submitting VAT return in time.
Many people were given clearance from the office without any fine, he did not get any clearance even after providing fine, though NBR declared that anyone can be submitted VAT return within the stipulated time without penalty.”
Another businessman said, he submitted VAT return to a VAT circle located at Chashara in Narayanganj. He was in dire straits due to VAT complications. If someone doesn’t follow the instructions of the concerned officials, he or she will face harassment starting from factory inspection. When a new officer comes, new rules are imposed.
Such harassment is not only in VAT, there are many such allegations of taxpayers, who are being harassed after falling into legal trap.
Recently, an expatriate worker, who built a three-storied resident in the capital after a lifetime effort has fallen into trouble, while he went to a circle of tax zone-13 of the capital.
Angered by the concerned officer, his tax file was audited. Later, an income tax of about the same amount spent for the construction of his house was levied, which appeal is still ongoing.
According to NBR sources, the target for VAT collection in the first six months of the current financial year from July 20 to January 21, was Tk 65,080 crore. VAT collection during the period under review was Tk 49,399 crore. The VAT deficit in six months is Tk 15,6 81 crore.
In the first seven months of the financial year, the revenue growth in VAT was minus 2.08 percent. The VAT collection is in the worst position among the three sectors of NBR.
Economists said that, not being able to bring everyone under automation, administrative inefficiency and harassment are having an adverse effect on the collection of VAT during the corona pandemic. Besides, VAT collection has also come down due to less purchasing in the corona epidemic.
Mirza Azizul Islam, a former finance adviser to the caretaker government said that, income of many people has decreased due to corona. Similarly, production has decreased. Negative impact has fallen into the import of capital equipments. Overall, purchases have decreased, while VAT collection has also decreased.
According to sources, the revenue target of NBR in the first seven months of the current financial year was Tk 1,69,008 crore.
Tk 1,69,007 crore revenue has been collected during the discussed period. The revenue deficit in seven months was 38,930 crore. The average revenue growth in the first seven months of the fiscal year was 2.76 percent. The seven-month target of NBR income tax was Tk 49,045 crore and Tk 40,950 crore has been realized.
The income tax revenue in seven months was 7,095 crore. The target for revenue collection in the import-export sector was Tk 54,881 crore and Tk 39,727 crore was collected. The deficit in import and export in seven months was 15,153 crore.
Former Chief Economist of the World Bank Zahid Hossain said, “The NBR has insisted on increasing VAT collection. The biggest thing is that VAT payers will not be able to enjoy this benefit, if they do not bring everyone under VAT automation. Apart from this, there are various complications in VAT, the biggest complication is administrative inefficiency.”
NBR has already entered the EFD era by eliminating the ECR system. To encourage people to pay VAT, lottery system has been introduced among EFD customers on the 5th of every month. The first lottery was held on February 5. This process will continue every month. In addition, the NBR is working to make it easier to submit VAT returns. The VAT online project has already been extended. Emphasis is being given on the online process to expand the scope of VAT across the country. So that VAT payers can easily pay VAT. But, the concerned people also think that the activities of NBR are not gaining momentum due to administrative complications.