October revenue sees 10% growth – despite import curb

Infograph: TBS

The country's overall revenue collection saw a slight improvement in October despite most of the key indicators of the macroeconomy currently trending downward.

According to the National Board of Revenue (NBR) sources, the growth in revenue collection was 7.67% in September, which rose to 10% in October.

Though the overall revenue collection rose by 10% in October, it is still 5% less than the corresponding period last year.

From July to October of the current financial year, the overall revenue collection from import duty, VAT and income tax has grown by 14%, which is also less than the same period of the last fiscal.

However, the total collection of import tax [customs duty, value-added tax (VAT) and tax] increased by less than 6% in October, which was 22% in the same period of the last fiscal year 2021-22, said NBR sources, adding that the import tax collection declined a bit due to import curb measures.

A senior official of NBR's Customs Department, requesting anonymity, told The Business Standard (TBS), "The NBR has increased the regulatory duty to discourage the import of several products including fruits and banks have reduced the opening of letters of credit (LC) for imports, resulting in lower duty collection."

When asked whether the situation will change in the coming months, he said, "The central bank governor said that imports may increase from December. We too are counting on that."

Mostafa Azad Chowdhury Babu, senior vice-president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), told TBS, "Banks do not want to open LCs due to the abnormal increase in the price of the US dollar. Traders are also not importing anything without necessity. That is why we are seeing a downturn in revenue."

He, however, thinks that there is scope to increase VAT collection at the local trading stage.

According to central bank data, the country's LC opening rate also witnessed substantial drops. LC-opening fell by 7.24% in October, 21% in September and 11% in August.

The key economic indicators are currently trending downward. The export earnings decreased by almost 8% in October and remittance decreased by more than 7%.

The NBR data shows that the average revenue collection in July and August increased by around 19%. 

According to NBR sources, Tk23,777 crores of revenue was collected in October, which was Tk21,599 crores in the same period of the last financial year. Total revenue collection fell short by Tk2,349 crore of the target in October.