Tax revenue collection to face Tk 20b shortfall

Aggregate tax revenue collection may face Tk 20 billion shortfalls against its target for the just concluded fiscal year (FY) 2013-14, largely because of political turmoil and decline in operating profit of private commercial banks (PCBs), especially in the first half of the fiscal.
According to a provisional estimation of the National Board of Revenue (NBR), the Large Taxpayers Unit (LTU) of the Income Tax Wing faced Tk 10 billion shortfall against its revenue collection target from the banks. Income tax collection faced Tk 8.0 billion shortfall against its revised target.
Decline in operating profit of the PCBs in calendar year 2013, cut in tax at source on export earnings, and sluggish business activities due to political impasse have been cited as reasons behind the revenue shortfall by the NBR officials.
According to a provisional figure, revenue collection by other two wings - Value Added Tax (VAT) and Customs - also faced a blow in the last FY.
However, VAT and import duty collection data is yet to be compiled finally. Officials said the final statistics of tax revenue collection will be available by July 20.
Tax officials at the field-level offices said the NBR lost some Tk 5.0 billion revenue due to reduction of tax at source for ready-made garments and knitwear exporters to 0.30 per cent while to 0.60 per cent for other exporters from 0.80 per cent.
They also claimed another Tk 5.0 billion loss of income tax due to high rate of investment rebates for individual taxpayers in the last FY.
Income tax officials said despite relentless effort the Income Tax Wing missed its target. They also held political impasse responsible for missing the target.
However, income tax collection achieved 17.62 per cent growth in the last FY compared to that of the corresponding year. The targeted growth for income tax collection was 22 per cent in FY 2013-14 over the previous year.
A senior NBR official said banks have paid 32 per cent less revenue than expected by the taxmen. The shortfall triggered, as tax collection dropped from the large taxpayers, especially from banks, he added.
The target for the Income Tax Wing was set Tk 443.60 billion, while aggregate revenue collection target for NBR was set Tk 1.25 trillion for FY 2013-14.
The official also said shortfall may come down slightly after getting the final figure of revenue collection.
Tax officials said tax collection depends on GDP growth and overall economic mobility of the country that was seriously hindered in the first half of the last FY due to political turbulence.