Income tax collection in the first five months of the current fiscal year (FY) fell short of its target by nearly Tk 15 billion due to the ongoing political unrest that has cut down income, and import of commodities.
The turbulent situation that continued in the second quarter of the current fiscal year hit the upward growth of tax collection causing the shortfall against its target.
The National Board of Revenue (NBR) collected Tk 110 billion in July-November period.
However, the wing has achieved 29 per cent growth over the corresponding period in the last FY.
Tax officials said the growth of income tax collection has been estimated at 37 per cent over the last year's tax collection, "which is quite impossible in this situation".
The income tax wing collects 50 per cent tax as Advance Income Tax (AIT) that is deducted at source. Collection of AIT largely depends on import volume of products.
Import orders for products dropped by 0.89 per cent in November last, compared to that of the previous month according to a data of Bangladesh Bank. The officials concerned predict further fall in import orders in the coming months.
Banks and financial institutions are the second-largest source of income tax collection. Decline in the banks' profit directly affects corporate tax collection. Banks pay the highest 42.5 per cent corporate tax to the public exchequer.
In 2012, the banks' net profit dropped 40 per cent to Tk 44.66 billion against Tk 75.20 billion in 2011. However, the operating profit of banks rose by 5.6 per cent compared to that of the corresponding period in the last fiscal year. Taxmen fear a sharp fall in profit of some large local private commercial banks in 2013 after reviewing the trend.
The negative trends seen in the large taxpayers have prompted worries among the taxmen about archiving the target of direct tax in the current fiscal year.
A senior tax official involved with the field offices said the situation has forced the taxmen to slow down their drive.
"If a businessman cannot earn money in the past three months, then how taxmen can ask him to pay tax," he said.
People are not moving from one place to another unless it becomes urgent due to security reasons, he said.
Shopping malls and business outlets cannot operate properly without customers, he added.
Sale of luxury and less important products dropped significantly amid the cut in income of common people, the official said.
Tax officials said the income tax authorities were now focusing more on desk auditing to find out tax evasion in the existing tax files of taxpayers.
Some 1.0 million taxpayers submitted their tax return in the fiscal year 2012-13. Of them, the income tax authorities selected some 1.0 to 2.0 per cent for auditing.
However, experts and tax lawyers are critical about auditing the tax files submitted under Universal Self-assessment System. They said the system has been introduced to accept tax return of individual taxpayers without question for a certain time.
Taxmen are not following the rules and auditing the tax files indiscriminately, said a source.
He said the taxmen should look into large tax-sources to find out evasion. Auditing of individual tax files can hardly recover any significant amount of revenue, it only harasses the taxpayers.
In the current fiscal, the government has set Tk 483 billion target from income tax collection out of the aggregate tax revenue collection target of Tk 1.36 trillion.