Revenue falls Tk27,557cr short of target in five months

The National Revenue Board (NBR) fell Tk27,557cr short of the target in the first five months of the current fiscal year – amid the coronavirus pandemic affecting every sector of the country.

However, revenue board officials are happy about the 1.18% growth outlook in July-November compared to the corresponding period last year.

"The pandemic has had a major negative impact on economic activities. Both imports and exports have declined," revenue board Chairman Abu Hena Md Rahmatul Muneem told the media.

He, however, stated that all NBR staffers are working to attain the collection target through automation.    

In the meantime, NBR officials say the annual revenue collection target has not been set taking virus effects into account. As a result, the deficit looks bigger than the target. However, revenue has been better even amid the pandemic owing to import-export resumption and in view of the deadline being set for income tax return submission.

According to the NBR, revenue collection clocked Tk85,403 crore against the target of Tk112,960 crore in the last July-November period. Growth, which stands at 1.18%, was 6.19% in the corresponding period of the previous year.    

Experts have credited imports and income tax for the positive collection outlook even amid the pandemic.

Ahsan H Mansur, executive director of the Policy Research Institute, said the country could not import many essential items at the beginning of the current fiscal year since global trade remained almost suspended.

"This has raised imports in the last couple of months. On the other hand, the deadline for income tax return submission also contributed to the collection," he said, adding that it is still unclear whether the growth in the collection will last.       

Customs duty in imports and exports contributed the highest 6.48% to the growth in July-November. The revenue board collected Tk27,778 crore from the sector during the time, said NBR sources.     

Customs officials said a huge quantity of products ordered earlier entered the country in the last couple of months. Import of cement clinkers, steel and machinery through Chattogram port kept rising during the period.

Apart from customs, income tax also registered positive growth in the first five months of the current year. Income tax from individuals and companies witnessed a 4.22% growth during this time. The revenue board's collection from this sector was Tk25,933 crore.  

Revenue board officials say the sector gained momentum in September-October due to the obligation to file income tax returns for the 2020-21 fiscal year by 30 November. Moreover, the NBR received revenue from the sector as 85% tax had already been levied on sources of income.

In the meantime, VAT collection showed almost no improvement in the five months.    Consumption-based VAT collection was 5.21% lower than in the corresponding period of the previous year. The collection in this sector fell Tk10,834 crore short of the target, although the government, emphasising VAT automation, declared it as the main source of revenue.

NBR officials say people's consumption expenditure in the domestic market fell though economic activities resumed after the virus-led shutdown – letting VAT collection stay in negative growth.  

The NBR fixed its collection target for the 2020-21 fiscal year at Tk330,000 crore with a 33% growth, overlooking the virus fallout. The target for VAT collection has been set at the highest Tk128,873 crore, while it was Tk105,475 crore in income tax and Tk95,652 crore in customs.