Lacklustre tax revenue growth in July-Feb period of FY \\\'14

Doulot Akter Mala | Published: April 20, 2014 00:00:00 | Updated: November 30, 2024 06:01:00

The aggregate revenue collection maintained a sluggish growth in the first eight months of the current fiscal year (FY) due to poor investment trend, decline in the import of revenue-generating products and fall in business of major corporate taxpayers.
The National Board of Revenue (NBR) has collected around 55 per cent of its aggregate revised tax collection target in the first eight months of the current fiscal year with a 9.0 per cent growth in revenue over that of the corresponding period.
Aggregate target for the NBR was revised downward to Tk 1.25 trillion last month from Tk 1.36 trillion following economic slowdown due to political turmoil in the first half of the current FY.
In the July-February period, the NBR collected Tk 683.44 billion revenue against Tk 628.95 billion collected in the corresponding period.
Income tax wing has achieved the highest 14 per cent growth while domestic collection of Value Added Tax (VAT) posted a 13 per cent growth over the same period in the previous fiscal year.
However, import revenue collection marked a negative growth of nearly 1.0 per cent over that of the corresponding period.
Of the customs revenue, Supplementary Duty (SD) collection on import showed 7.0 per cent negative growth while the revenue from customs duty (CD) declined nearly 2.0 per cent.
Talking to the FE Saturday, a senior NBR official said revenue collection growth largely depends on the economic performance of the country.
"Income of some large taxpayers has reached the point of saturation. Besides, the implementation of the Annual Development Programme (ADP) was only 38 per cent until February of the current fiscal year," he said.
Large corporate taxpayers also faced problems in their operations due to political volatility in the first half of the current FY, he added.
Cigarette, cell phone companies, gas sectors and banks are the major taxpayers contributing around 40 per cent of the VAT collection.
Officials in the Large Taxpayers Unit (LTU) of the VAT wing said the government has cut Tk 50 billion of its revenue collection target for the current FY.
Until February, the LTU collected Tk 150 billion VAT against Tk 135 billion in the corresponding period last year.
Tax officials said investment scenario is a major factor for tax collection growth which is alarmingly low now. They said a few corporate taxpayers are now contributing a significant part of tax due to narrow tax net.
The government is likely to set Tk 1.49 trillion tax revenue target for fiscal 2014-15 pushing up the tax-GDP ratio to 20 per cent by the next five years. To achieve the target, the NBR has to explore new avenues rather than imposing tax burden on existing sources.