Recession forces NBR to slash revenue target by Tk 15b
Tuesday, 19 May 2009
Doulot Akter Mala
The government recently made a downward adjustment of the current year's revenue target of the National Revenue Board (NBR), slashing Tk 15 billion, as global economic recession seriously affected the internal revenue collection.
Total revenue earning target stands at Tk 530 billion from Tk 545 billion projected for the current year.
Finance minister AMA Muhith last week approved the revised target of NBR.
Revenue collection fell short of target by Tk 22 billion in the first nine months of the current year due to poor growth of Customs and VAT departments.
Customs department, which was supposed to contribute 41 per cent of the total revenue earning, faced a target shortfall of nearly Tk 15 billion alone, while VAT department's target shortfall stands at Tk 7.0 billion until March.
The NBR has revised Customs department's target at Tk 213 billion and Tk 177 billion for VAT department. The government had set Tk 225 billion and Tk 183 billion as targets for Customs and VAT departments respectively for the current year.
However, NBR has increased the income tax collection target by Tk 5.0 billion eyeing a big boost from company tax.
The NBR collected a total of Tk 351.73 billion revenue until March.
The revenue board has achieved a 12.36 per cent growth in the July-March period compared to that of the previous year.
Finance ministry recently asked the NBR to gear up its effort to achieve the revised target.
"We will have to collect Tk 179 billion more to achieve that. The revenue board will be able to achieve the target by the end of this year, as revenue earning usually boost up in the last month of every year," a revenue official said.
Income tax department achieved the highest growth rate of 21 per cent over the corresponding period, while VAT department 12.36 per cent and Customs duty 8.48 per cent, he said.
Customs department's poor revenue collection growth was the main reason for the downward adjustment of the revenue target, he added.
Prices of major revenue generating commodities dropped more than 50 per cent affecting the total import revenue, he said.
The NBR is now trying to realise the arrear duties and resolve court cases as soon as possible to raise import revenue collection, the official said.
Meanwhile, UNB adds: The government is likely to increase the amount of minimum tax for individual taxpayers from Tk 2,000 to Tk 2,500 in an effort to boost the revenue collection.
According to the existing system, an individual taxpayer has to pay 10 per cent of his income, if it exceeds Tk 1,65,000 but remains below Tk 2,75,000. Even if the tax amount remains below Tk 2,000, the individual taxpayer has to pay Tk 2,000 as minimum tax.
"There's a possibility to raise it up to Tk 2,500 to enhance the revenue collection from direct tax, but it's not final yet," said an NBR official, adding that more than 50 per cent of the total taxpayers are presently paying the minimum tax amount as their income tax.
In the 2007-08 fiscal, the government raised the minimum tax amount to Tk 2,000 from Tk 1,800 of the 2006-07 fiscal.
The government recently made a downward adjustment of the current year's revenue target of the National Revenue Board (NBR), slashing Tk 15 billion, as global economic recession seriously affected the internal revenue collection.
Total revenue earning target stands at Tk 530 billion from Tk 545 billion projected for the current year.
Finance minister AMA Muhith last week approved the revised target of NBR.
Revenue collection fell short of target by Tk 22 billion in the first nine months of the current year due to poor growth of Customs and VAT departments.
Customs department, which was supposed to contribute 41 per cent of the total revenue earning, faced a target shortfall of nearly Tk 15 billion alone, while VAT department's target shortfall stands at Tk 7.0 billion until March.
The NBR has revised Customs department's target at Tk 213 billion and Tk 177 billion for VAT department. The government had set Tk 225 billion and Tk 183 billion as targets for Customs and VAT departments respectively for the current year.
However, NBR has increased the income tax collection target by Tk 5.0 billion eyeing a big boost from company tax.
The NBR collected a total of Tk 351.73 billion revenue until March.
The revenue board has achieved a 12.36 per cent growth in the July-March period compared to that of the previous year.
Finance ministry recently asked the NBR to gear up its effort to achieve the revised target.
"We will have to collect Tk 179 billion more to achieve that. The revenue board will be able to achieve the target by the end of this year, as revenue earning usually boost up in the last month of every year," a revenue official said.
Income tax department achieved the highest growth rate of 21 per cent over the corresponding period, while VAT department 12.36 per cent and Customs duty 8.48 per cent, he said.
Customs department's poor revenue collection growth was the main reason for the downward adjustment of the revenue target, he added.
Prices of major revenue generating commodities dropped more than 50 per cent affecting the total import revenue, he said.
The NBR is now trying to realise the arrear duties and resolve court cases as soon as possible to raise import revenue collection, the official said.
Meanwhile, UNB adds: The government is likely to increase the amount of minimum tax for individual taxpayers from Tk 2,000 to Tk 2,500 in an effort to boost the revenue collection.
According to the existing system, an individual taxpayer has to pay 10 per cent of his income, if it exceeds Tk 1,65,000 but remains below Tk 2,75,000. Even if the tax amount remains below Tk 2,000, the individual taxpayer has to pay Tk 2,000 as minimum tax.
"There's a possibility to raise it up to Tk 2,500 to enhance the revenue collection from direct tax, but it's not final yet," said an NBR official, adding that more than 50 per cent of the total taxpayers are presently paying the minimum tax amount as their income tax.
In the 2007-08 fiscal, the government raised the minimum tax amount to Tk 2,000 from Tk 1,800 of the 2006-07 fiscal.