Driven by VAT, tax collection in July-Sept grows by 14.34pc

Government's tax-revenue collection grew by 14.34 per cent in the first quarter (Q1) of the current fiscal year riding on value-added tax (VAT) receipts.
The National Board of Revenue (NBR) collected an aggregate of Tk 767.51 billion in tax revenue until September 2023, against Tk 671.27 billion in the corresponding period last year, according to provisional data from the NBR.
However, the revenue authority fell short of its target by Tk 81.95 billion in the July-September period.
A senior tax official said the ambitious revenue collection target resulted in the shortfall, which has become common every month.
The government has set a tax revenue collection target of Tk 4.30 trillion for the current fiscal year. Until September, the target for the NBR was Tk 849.46 billion.
The official said the revenue board collected higher revenue from VAT in Q1, up by 18.07 per cent, followed by the customs wing. Income tax and travel tax grew by 17.47 per cent in this period.
However, import duty collection growth was poor at 7.45 per cent, following a decline in imports of revenue-generating commodities under the government's tight-fisted policy.
Officials said tax revenue collection might decline in the second quarter, as a major share of tax revenue comes from import sources as advance taxes.
Towfiqul Islam Khan, an economist at the Centre for Policy Dialogue (CPD), said the rising prices of commodities and fiscal measures introduced in the new income tax law had contributed to revenue mobilisation.
"The restrains in import are reflected in limited growth in revenue collection from external sources despite substantial depreciation of currencies," said Mr Khan -- a senior research fellow and co-ordinator of the CPD's Independent Review of Bangladesh's Development (IRBD) programme.
On challenges in upholding the growth in the coming months, he said the outlook for revenue collection would depend on several factors.
"The rising prices of commodities, further depreciation of the taka and the possibility of increased international oil prices will be a boon for revenue collection, but only at the expense of general citizens," he added.
The government's limited fiscal space is now reflected in its policies, as it is not interested in allowing tax reliefs for consumers, he added.
"The key will be to curb tax evasion and implement planned reforms," Mr Khan said. In the July-September period, the VAT wing collected Tk 289.82 billion against its target of Tk 311.36 billion.
The income tax wing collected Tk 236.41 billion while the customs wing collected Tk 241.27 billion. The targets for income tax and customs were Tk 271.68 billion and Tk 266.42 billion respectively.
Average revenue collection growth has been 10.64 per cent in the last five years.

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