Revenue receipt misses target by Tk 232.27b

Tax-revenue collection missed the time-bound target for the first half of this fiscal with a Tk 232.27-billion shortfall for several adversities, although the receipt showed some annualised growth.
The National Board of Revenue blames the target failure on import tightening under government's crisis-time austerity course and subdued manufacturing growth buffeted by several economic challenges.
According to its provisional data, the NBR collected Tk 1.65 trillion in taxes in the July-December period against its budgeted target at Tk 1.88 trillion for the period-incidentally signaling shortfall in budget spending over again.
However, the tax collection grew nearly 14 per cent year on year in this period over the corresponding period last year.
Three wings of the revenue board---income tax, customs and VAT---were trailing their respective target, despite achieving a double-digit growth over the H1FY23 mark.
The collection of value-added tax (VAT) lagged behind its task by Tk 60.70 billion followed by customs revenue Tk 86.63 billion and income-and travel taxes by Tk 85.92 billion.
In the H1, the VAT wing boasted the highest collection of revenue worth Tk 647.37 billion from the all-encompassing tax that marks a 16-percent growth over the corresponding period last year.
Income-and travel-tax collection also grew 16 per cent while customs-duty collection 9.16 per cent on a year-on-year basis.
The government has set Tk 4.30-trillion tax-revenue target for the current financial year (FY) 2023-24.
To get to the goal, the NBR will have to mobilise Tk 2.64 trillion in tax revenue during the next half (January-June) of the fiscal year.
In its US$4.7-billion loan package for Bangladesh-meant for propping up descending foreign-exchange reserves-the International Monetary Fund (IMF) has set a target for raising the country's lowly tax-GDP ratio by 0.5 per cent this year.
Speaking at a press conference Thursday on the occasion of the International Customs Day 2023, to be observed today (Friday), NBR chairman Abu Hena Md Rahmatul Muneem said the revenue authority was hopeful about steering up to the IMF-set mark.
"We have taken the IMF's target as challenge and working to achieve it," he told the revenue reporters.
Last year, the NBR's revenue-collection target was Tk 3.70 trillion. The target for revenue collection grew by 16.22 per cent in the current fiscal year, while average growth of tax-revenue collection in the last five years was 10.64 per cent.
In the H1, the NBR's revenue collection grew by 11 per cent.
Talking to the FE, Dr Masrur Reaz, founder and chairman of Policy Exchange Bangladesh, said the IMF-set target is not difficult to achieve if the NBR rationalises tax exemptions by reviewing those enjoying the benefit for long.
He notes that the revenue collection grew mainly due to implementation of government's development projects where a big chunk of VAT is collected at source.
On income tax, Dr Reaz says many of the taxpayers have submitted tax returns centering the deadline, November 30, 2023, which has been extended to January 31, 2024 now.
"There are no such significant elements in the economy to contribute to the tax-revenue-collection growth given the contractionary import policy, squeezed demand for consumer products for inflationary pressure," he says about some of the main headwinds.
The economist suggests that the government should treat the state-owned enterprises and private enterprises equally withdrawing their special tax privileges.

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