Price rises on the international market proved a boon for government revenue receipt until February with import-tax collection registering a robust 23-perecnt growth, official count shows.
The National Board of Revenue (NBR) achieved an average 15.28-percent growth, year on year, in tax-revenue collection in the July-February period of the fiscal year 2021-22, according the provisional data released Sunday by the NBR.
It collected around 65 per cent of its revenue as advance or source tax on imports which cost much higher now for price rises worldwide and result in increased tax incidence.
Tax has been imposed on the declared value of most import products. Upward or downward trend in prices of revenue-generating products leaves immediate impact on tax-revenue collection-and ultimately on the domestic commodity market.
However, the revenue authority will have to collect Tk 1.53 trillion more in the next four months from March to June to achieve its target of Tk 3.30 trillion for the entire financial year.
In the first eight months of the FY, the NBR collected 53 per cent of its target for the entire fiscal year.
In the July-February period, the NBR collected Tk 1.76 trillion in tax revenue against Tk 1.53 trillion in the corresponding period of last fiscal.
Its customs wing collected Tk 567.76 billion in tax revenue followed by VAT Tk 663 billion and income tax Tk 533 billion.
The VAT wing achieved 11-percent growth while income tax department 14 per cent in this period.
Officials say although the NBR cut import taxes on edible oils and sugar, its revenue loss is not significant due to global price hike of those commodities.
In the month of February alone, the NBR received Tk 230.19 billion worth of revenue, posting 10-per cent growth.
A senior tax official says despite impressive growth, above the average growth of last five years at 14 per cent, the taxmen may face challenges in achieving the ambitious target.
"We expect downward revision of the tax-revenue target like previous years to ease pressure on us and taxpayers, too," he says.
The NBR cannot keep its budgetary fiscal measures unchanged to achieve the tax target on the basis of those, he adds.
"It has to give tax exemptions through different statutory orders in national interest," he notes.
However, top NBR officials are hopeful about getting to the goal if the situation remains unchanged.
Businesses, however, on different occasions urged the NBR not to give tax collection top preferences in the current volatile global economic situation following the Russia-Ukraine war.
They urged tax cutbacks to rein in prices of essential commodities to give relief to the consumers from the domestic market upturns.
Dr Ahsan H Mansur, Executive Director of the Policy Research Institute (PRI), however, says the revenue-collection growth is not satisfactory considering higher commodity imports that grew by 54 per cent.
"Given the existing tax revenue-collection trend, the tax-revenue collection might reach Tk 2.80 trillion by end of the FY," he says.
He also observes that the tax authority did not cut taxes commensurate with the price hike of essential commodities.
Tax-breaks could be offered through price analysis as it shoots up by 20 to 40 per cent for some commodities, he says.
He notes that the month of February saw a higher tax-revenue collection as import for Ramadan and Eid-ul-Fitr took place in that month.
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