Tax collection misses mark despite VAT uptick

Tax-revenue collection faced Tk 274.29-billion shortfall even against a pared-down target for the immediate-past fiscal year though VAT receipt made a quantum leap.
In June, the final month of the financial year, the VAT wing boasted a record growth of 47.2 per cent by collecting Tk 229.54 billion worth of the all-encompassing value-added tax in a single month.
The National Board of Revenue (NBR) bagged around Tk 3.83 trillion in taxes in the last FY to lag even against its trimmed target at Tk 4.10 trillion.
Among NBR's three wings, VAT collection grew 20 per cent while income tax 15.6 per cent and customs 8.72 per cent.
Only the VAT wing came close to the mark collecting Tk 1.50 trillion, out of targeted Tk 1.51 trillion, while income tax amounted to Tk 1.31 trillion and customs duties Tk 1.0 trillion.
The revised target for the income-tax wing was Tk 1.47 trillion and Tk 1.10 trillion was for the customs wing.
According to Ministry of Finance data, the NBR could garner Tk 3.19 trillion worth of total revenue in FY23. Of the sum, it mobilised Tk 1.07 trillion on account of taxes on incomes, profits and capital gains, Tk 1.26 trillion as VAT, Tk 445.33 billion as supplementary taxes and Tk 361.81 billion as import duty.
Excise-duty receipt was worth Tk 40.66 billion in the FY23 while export duty Tk 30 billion and other taxes Tk 15.78 billion, according to budget-in-brief document of the finance ministry.
However, the NBR, in July last year, released revenue data for FY 2022-23 showing an aggregate amount of Tk 3.31 trillion for the fiscal.
From the MoF data published during the budget placing for the current fiscal year, FE has found the tax-revenue growth of nearly 20 per cent.
However, if NBR's last FY reckonings are taken into account, the growth in tax-revenue collection was 15 per cent in FY24.
The tax data for FY2024 are still provisional and might have varied by the yearend after ibas++ data of MoF would be available.
A senior official of the MoF said the tax-collection data would need reconciliation among the Accountant- General office, the NBR and ibas++ before making it public.
He, however, said the International Monetary Fund (IMF) accepts NBR-disclosed statistics on domestic revenue-mobilisation trend.
Dr Moinul Khan, Member of the VAT implementation wing, says VAT collection crossed the IMF-set target, Tk 1.43 trillion, in the last fiscal year though having a nominal deficit against its target.
The VAT wing realized Tk 50 billion from Petrobangla which remained undisputed arrears for long.
He, however, says the Tk 1.51-billion shortfall in VAT collection against its target would be recovered as some of the taxes for the month of June remained unrealised.
"We have collected Tk 70.29-billion tax that was pending as arrears for long while Tk 10.07 billion by thwarting VAT evasion, Tk 15 billion through audit, Tk 19.40 billion by scrutinizing VAT returns and Tk 6.0 billion by resolving court cases," he adds.
He thinks the fiscal measures helped the VAT wing in collecting Tk 109.80 billion last FY.
On the VAT front, the large taxpayers unit achieved a 26-percent growth, Dhaka East 22 per cent, Rangpur 20 per cent, Khulna 18, Chittagong 18 per cent, Dhaka west 17.15 per cent, Dhaka North 13.43 per cent, Rajshahi 15.16 per cent, Cumilla 12.96 per cent, Dhaka South 12 per cent, Sylhet 11.04 per cent, and Jashor 10.38 per cent.
"Efforts to realise arrears, impose penal measures as well as motivation have helped the government achieve higher growth in VAT collection," says Mr Khan.

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