Revenue collection rises 15% in first two months of FY24 due to higher VATs

The National Board of Revenue has witnessed 14.74% growth in revenue collection in the first two months of the current fiscal year, mainly due to an increase in VAT and income tax collection.

Sources at the National Board of Revenue said they collected Tk46,233 crore revenue in July and August of FY24. The amount was higher than the revenue collected in the same period of FY23, but it was around Tk4,087 crores less than the target for that period in this fiscal year. 

The National Board of Revenue officials said the reduction or withdrawal of tax exemption facilities in several sectors, and increase of taxes and VATs in some other sectors including cigarettes, beverages, land registration have led to a jump in revenue collection.

At the same time, increasing supervision to stop tax evasion and increasing the collection of customs duty through new valuation of some imported goods have also played an important role in boosting revenue.

An official of the National Board of Revenue told The Business Standard, on condition of anonymity, that the VATs on a number of items is higher this year compared to the previous year. As a result, more VAT has been collected from those sectors in the first two months of FY24.

He also said the government is introducing electronic fiscal devices in various business establishments in Dhaka and Chattogram. As a result, VAT collection at the trading stage may increase in the future.

According to sources at the National Board of Revenue, VAT collection increased by nearly 20%, and income tax collection by around 16% in the first two months of FY24 compared to the same period of the previous fiscal year.

However, a number of experts were cautious about terming the revenue growth rate as satisfactory. 

Muhammad Abdul Mazid, ex-chairman of the National Board of Revenue, told TBS, "The year on year growth of 16% is nothing to be satisfied with as the National Board of Revenue's target was above 30%. This growth is not enough."

He also said revenue collection may have increased by 16% due to taking some measures in the budget, but the overall economic situation is not as good as expected.

The National Board of Revenue collected Tk3.31 lakh crore in FY23. They aim to collect Tk4.3 lakh crore in FY24, which is around 30% higher compared to last year. 

Revenue collection in the country has increased by 11% every year on an average in the last five fiscal years, according to the National Board of Revenue.