Sluggish consumption, bleak investment squeeze tax revenue receipts

Tax-revenue collection marked a Tk 14.84-billion shortfall from the target in the first five months of the current fiscal year (FY) for a perceived slowdown in two segments of the economy.
Sluggish trend in domestic consumption and bleak investment scenario pared down the revenue growth, according to officials.
The National Board of Revenue (NBR) collected an aggregate amount of Tk 477.20 billion in taxes from its three wings in the July-November period against its target for Tk 492.04 billion, provisional data showed.
Value Added Tax (VAT) collection from domestic sources faced with the highest shortfall by Tk 20 billion, causing an aggregate deficit in revenue collection.
However, income tax and customs wing have achieved target for the five months.  
The income-tax wing achieved a 14 per cent growth while customs 11.34 per cent in revenue collection against the matching period previous year.
Aggregate tax-revenue collection achieved 13.92 per cent growth in that period over the corresponding period of last year.
Tax officials said the VAT collection dropped mainly due to fall in revenue collection from cell-phone companies, cigarettes and other service sectors.
They said tax collection of Large Taxpayers Unit (LTU) had been lagging behind its target during the last five months. In the first quarter, the LTU faced a Tk 5.0-billion shortfall against its target.
"Service sector failed to perform up to expected level of the taxmen in the first half that reflected a fall in payment of VAT," said one official.
They said income-tax collection may see a boost in December as banks and other large corporate taxpayers are expected to submit their tax returns by the December 31 deadline.
Main focus on revenue collection of the NBR is income tax and VAT while customs revenue target is gradually going down with the concept of global trade facilitation.
Customs official said major revenue-generating items, that fall under 25 per cent customs duty, decreased in the current fiscal year.
The sluggish trend of import of those items may affect the revenue collection by the customs wing.
The government has set revenue-collection target at Tk 1.49 trillion for the current FY. So far, the NBR could collect one-third of the target in the first five months.
Officials, however, apprehend a large amount of shortfall in tax-revenue collection for the current FY as relevant economic indicators are not performing in line with the assumption to achieve the target.
doulot_akter@yahoo.com