Uphill task ahead for NBR

The National Board of Revenue (NBR) has been left with a target of collecting Tk 102,244 crore in the last two months of the ongoing fiscal year as it logged 69 per cent of its overall target until April.

Tax collection stood at Tk 227,756 crore until April against the target of Tk 330,000 crore given by the government at the beginning of the current fiscal year, according to data released by the NBR yesterday.

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However, NBR officials and an analyst said the remaining target is unlikely to be achieved this year with the current growth rate.

The tax collector posted 23 per cent year-on-year growth to hit Tk 23,730 crore in April riding on buoyant growth of income tax receipts and increased Value Added Tax (VAT).

Yet, it registered 15 per cent year-on-year growth in revenue collection during the July-April period of fiscal year 2021-22.

To attain the remining target, it will have to post 45 per cent growth in collection in the last two months of the fiscal year.

"We are going to see a huge shortfall from the target despite the fact that the overall tax target has remained the same for the last two years," said Ahsan H Mansur, executive director of the Policy Research Institute (PRI) of Bangladesh.

He said the NBR could collect Tk 60,000 crore at best in the May-June months.

Tax collection usually remains higher in the last quarter of a fiscal year because of the implementation pace of Annual Development Programmes (ADP) increases during this time.

Referring to the overall collection growth in the current fiscal year, Mansur, a former economist at the International Monetary Fund, said overall collection should have grown higher amid surging imports.

Imports grew 44 per cent in the first nine months of the current fiscal year, according to Bangladesh Bank data.

The revenue authority logged 19.5 per cent year-on-year growth to Tk 73,060 crore in customs duty collection during the July-April period.

Apart from customs duty collection, the NBR could post 10.5 per cent year-on-year growth to Tk 84,916 crore in the July-April period, reflecting an increase over March.

In April this fiscal year, VAT receipts shot up 16 per cent year-on-year.

Income tax collection rose 57 per cent at the same time while overall collection grew 16 per cent in the first 10 months of the fiscal year.

Taxmen collected Tk 69,110 crore during the period, according to the data.

An official of the NBR seeking to remain unnamed said overall collection might be around Tk 300,000 crore by the end of this fiscal year.

Mansur however was sceptical in this regard.

Citing the collection growth trend of 13 per cent for the last nine years, he said the NBR might not be able to achieve the goal even if the current year's target is given in the next fiscal year.

"It will not be an easy target," he said, adding that economic growth would slow down because of monetary tightening, exchange rate shock and possible increase in prices of petroleum and fertiliser to reduce pressure on the state coffer to bear subsidy bills for the two items.

The NBR is likely to get a Tk 370,000 crore tax target for the next fiscal year of 2022-23.