The National Board of Revenue (NBR) collected Tk 3,25,272 crore as revenue in the just-concluded fiscal year 2022-23, registering an 8.12 per cent growth against 16.09 per cent in the previous fiscal year.
However, revenue collection fell Tk 44,727 crore short of its target in the FY2022-23. The NBR attained 87.91 per cent of its revenue target of Tk 3,70,000 crore, according to the provisional data as of Sunday.
The National Board of Revenue (NBR) collected Tk 301,634 crore as revenue in the previous financial year with a healthy growth of 16.09 per cent and achieved 91 per cent of its actual target.
Due to economic headwinds triggered by Russia-Ukraine war, corporations and business establishments could not regain their previous positions after Covid-19, a decrease in fund releasing in the government’s projects as a result of forex crunch which caused a deficiency in the revenue collection, NBR officials claim.
Besides, a decrease of imports abated domestic production and overall business profits. People’s purchase capacity shrank due to high inflation Bangladesh witnessed during the last FY, insiders said.
Economists say without revenue mobilisation with sustainable policymaking and development of tax administration, the country cannot be beneficiary in the long run in this dwindling situation of the economy.
In the previous financial year, the board collected Tk 1,20,633 crore out of the total revenue from VAT, including VAT at local stage, supplementary duty at local stage and turnover tax with a hefty growth of 11.27 per cent over the previous FY.
Followed by Tk 1,12,921 crore with 9.62 per cent growth at direct tax including income tax, travel tax and Tk 91,717 crore with a lesser growth to 2.56 per cent at import stage including import duty, VAT at import, supplementary duty at import and export duty due to the government’s austerity measures and crisis in L/C opening.
According to the latest data released by the Bangladesh Bank, imports increased by 14.11 per cent to $64.76 billion during the July-May period of the previous fiscal year.
The targets for the three wings were Tk 1.36 lakh crore, Tk 1.22 lakh crore and Tk 1.11 lakh crore respectively in the FY23.
The revenue officials said finally the revenue collection growth rate might change positively in the last fiscal after concluding VAT return submission deadline of July 15 next.
The revenue body collected Tk 2,61,689 crore in FY2020-21, Tk 2,16,452 crore in the FY 2019-20 while it earned Tk 2,20,772 crore in the FY2018-19 and Tk 2,02,313 crore in the FY2017-19.
At the very beginning of the outgoing financial year, economists said that it would not be possible to achieve it by the end of the year and the target was fixed on the basis of high desire and it was unrealistic to reach the actual target.
At the end of the year, its reflection was seen. All the three sectors of revenue collection were far behind the target.
Executive Director of the Policy Research Institute Ahsan H Mansur said that the maximum collection would be Tk 3,33,000 to Tk 3,35,000 crore. The target has not yet been attained. “The collection will decrease further when the finance ministry published the data. It meant that the government failed to achieve the target.”
Due to this, the government had to borrow Tk 1,24,123 crore. Of the total, Tk 98,826 crore was borrowed from the central bank which might fuel inflation further.
The government borrowing from banks increased. The target was revised upward to Tk 1.15 lakh crore from Tk 1.06 lakh crore in the original budget for FY23.
“NBR is still working on the account in paper since British period. NBR does not do any scientific analysis, data analysis, and gather information. They have no database; they work on those files, files, files! What will be happened with it? Nothing will be happened,” he said.
He thinks that it will worsen in the current financial year due to the ongoing economic headwinds.
The NBR will face significant pressure in the ongoing financial year, mostly to meet the International Monetary Fund’s (IMF) $4.7 billion loan conditions. One of the IMF conditions is that Bangladesh has to increase the tax-to-GDP ratio by 0.5 percentage points in FY24.
At the same time, the revenue board has to grow by 32 per cent to meet the target of Tk 4,30,000 crore in the current financial year. However, the NBR never witnessed such growth.
