Revenue shortfalls continue to widen, marking Tk42,000cr in 5 months

The government's revenue collection continues to fall short of its target, with the shortfall widening to Tk42,000 crore in the first five months of the current fiscal year, increasing by Tk10,000 crore in November alone.

Experts attribute this to the lack of expected economic momentum and tax exemptions on importing various essential commodities.

Officials also cite reduction or halt in production in some companies, driven by the shifting political landscape, as a contributing factor to the revenue decline.

Sources at the National Board of Revenue (NBR) say revenue collection has declined not only compared to the target but also year-on-year, dropping by about 3% or Tk3,408 crore until last month. Of this shortfall, around Tk2,500 crore occurred in November alone.

Between July and November, revenue collection saw year-on-year declines in three months. Additionally, NBR sources say the deficit in revenue collection stood at around Tk31,000 crore by the end of October, which expanded to Tk42,230 crore by the end of November.

The NBR has expressed concern over the declining revenue collection. It prompted NBR Chairman Abdur Rahman Khan to convene a meeting with senior field-level officials yesterday to explore strategies for boosting collections.

A commissioner who attended the meeting, speaking on condition of anonymity, told The Business Standard, "The chairman emphasised fair revenue collection without harassing taxpayers and warned against reporting any fake revenue figures."

The NBR's revenue collection target for the current fiscal year is Tk4.80 lakh crore, which experts have described as higher than the current economic reality.

However, only Tk1.27 lakh crore has been collected against a target of Tk1.69 lakh crore by the end of November.

Similarly, Tk25,000 crore has been collected against a monthly target of Tk36,900 crore, compared to Tk28,000 crore during the same period last year.

In addition to a slight economic slowdown, field-level officials attributed the shortfall to other contributing factors.

Md Zakir Hossain, Commissioner of Customs, Excise, and VAT Commissionerate, Chattogram, told The Business Standard, "My Commissionerate has collected Tk34 crore less than the target."

"From July to November, petroleum imports have decreased by eight lakh tonnes, and due to tax reduction, revenue per litre has dropped by Tk0.79, resulting in a revenue decline of Tk219 crore in this sector," he added.

"Due to tax exemptions on edible oil, there is a shortfall of Tk70 crore per month. S Alam's business, which used to contribute an average of Tk20 crore per month, is now closed. If this revenue were included, our growth would be much higher than last month."  

However, he added, "Imports are increasing in December. As a result, we hope that revenue will increase slightly in the coming months."

Another official, who did not want to be named, said the revenue target would also increase in the coming months. As a result, even if collections rise, the gap cannot be reduced and may widen further.

He said, "This gap in collection compared to the target could exceed Tk80,000 crore by the end of the fiscal year."

Farid Uddin, a former NBR member, said that many government development projects have slowed down, resulting in a loss of tax and VAT collections from this sector. This has also contributed to the decline in revenue.

"Despite all this, the revenue being collected is not bad at all," he added.