Revenue collection for the national exchequer suffered an aggregate Tk 20-billion shortfall in the first half of the current fiscal year (FY), according to provisional data, while more depressing signs are ostensibly heralding the last part.
Provisional data of the National Board of Revenue (NBR) show the shortage against the target set in the 2014-15 upscale budget.
Tax officials said an ambitious target of tax collection fixed with the GDP growth projection for FY 2014-15 and sluggish trend of economic activity coupled with poor investment caused the shortfall.
The government fixed the tax-revenue target at Tk 1.49 trillion concomitant with a 7.3 per cent GDP growth.
Proper implementation of the Annual Development Programme (ADP), import growth around 15 per cent and an improved investment scenario from both local and foreign investors were envisaged in setting the targets, officials said.
Three wings of the board collected Tk 584.49 billion in tax in the July-December period, according to the provisional figure of the NBR. The target was Tk 604.53 billion.
Aggregate tax-revenue collection posted 15.24 per cent growth in the first half (H1) against the corresponding period last year.
The NBR could collect 39.22 per cent of its aggregate tax-collection target. The revenue authority will have to garner Tk 905 billion in the ongoing six months to get to the lofty goal.
The highest shortfall has been found in collection of Value Added Tax (VAT), largely caused by sluggish business activity. The wing faced Tk 26.55-billion shortfall against its target for the period.
A senior NBR official said the target for VAT had been set by expecting 30 per cent growth over the previous FY.
"The businesses could not grow to that level in 2014 to generate additional 30 per cent VAT for the public exchequer," he said.
Officials said the final collection figure of VAT would be available by end of January and that may add to the collection figure and reduce the shortfall.
Collection of VAT from major corporate houses marked a significant decline this FY mainly due to fall in revenue from cigarette-manufacturing companies and mobile-phone operators.
However, income tax and customs wings have achieved their respective tax-collection targets for the H1.
The income-tax wing collected Tk 187.21 billion while customs department Tk 177.84 billion.
The tax official said the NBR might be able to collect an aggregate amount of Tk1.37 trillion in revenue in the current FY in the existing tax measures against its target for Tk 1.49 trillion.
They said tax-GDP ratio might stand at 8.95 per cent in FY 2014-15. The tax-GDP ratio was 8.94 per cent in FY 2013-14--one of the poor tallies in South Asia.
The NBR official said the prevailing political uncertainty may hit the tax-revenue collection.
"Most of the local manufacturers cannot transport their goods from factories due to continued blockades in January," he said.
Smooth flow of supplies, increase in imports and pace of development works are among the major factors of stimulating tax-revenue collection, he added.
In FY 2007-08 to 2011-12, revenue collection had attained an impressive growth due to increase in petroleum and commodity prices on the international market, import value, depreciation of the taka against the US dollar, implementation of the Annual Development Programme (ADP), inflation and increase in source tax, according to an NBR analysis.
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