The National Board of Revenue (NBR), during the July-December period, attained only 38.52 per cent of its overall revenue collection target for FY24, because of economic slowdown, dip in imports and reduced purchase capacity due to skyrocketing inflation.
NBR is now looking at a mountainous task of collecting Tk 2,64,370 crore within the remaining six months to hit the fiscal year target of Tk 4,30,000 crore,
The NBR collected Tk 1,65,629 crore, up by around 14 per cent compared year-on-year, during the first half of FY24. During this period, it witnessed a shortfall of Tk 23,227 crore against its target for the July-December period, show the revenue board statistics.
The board says the slowdown in businesses, declining imports, and ongoing forex crunch are posing a challenge in attaining the revenue collection target. Experts say big reforms are crucial for boosting revenue, as a low Tax-to-GDP ratio could put a country into a difficult situation.
This slow pace of revenue collection during the July-December period could lead to a serious gap in the year-end target, triggering additional pressure on fiscal measures amidst the ongoing economic crisis.
The NBR, despite concerted efforts, seems unable to attain its revenue collection target, and it is gradually falling behind, particularly in customs duties and income tax stages, starting from the beginning of this FY.
It should be noted that though Bangladesh had set Tk 4,30,000 crore revenue target, the IMF’s target is only Tk 4,00,500 crore.
So, concerns have escalated as the NBR struggles even to keep up with the International Monetary Fund's (IMF) reduced revenue collection target for FY24, imposed during the approval of its $4.7 billion loan to Bangladesh.
The revenue board's inability to meet the IMF target has raised doubts about its capacity to address the evolving economic landscape.
NBR Chairman Abu Hena Md Rahmatul Muneem, during a press briefing on customs day on Thursday, said, “An increase in revenue collection aligning with the IMF goal is indeed a challenge.
“To address this challenge, various measures have been implemented, and in the coming days, additional specific measures will be developed to further strengthen the income tax, VAT and customs wings. We are up to the challenge, and hope to succeed.”
However, concerns have been raised by experts, such as Policy Research Institute (PRI) Executive Director Ahsan H Mansur, who emphasised the need for substantial reforms to avoid endangering the government's fiscal position.
“The NBR needs a heavy reform. No country in the world can maintain macroeconomic stability at a 7.5 per cent to 8 per cent tax-to-GDP ratio. So, Bangladesh will be unable to do so as well,” he said.
According to NBR sources, the board has not been able to achieve the targets in any of the three sectors – imports, VAT, and income tax – in the first five months of the incumbent FY.
During this timeframe, the income tax wing achieved the least against its actual target and saw a highest shortfall compared to other wings. The wing attained only around 33.5 per cent of the fiscal year target.
The value-added tax (VAT) wing achieved 40.69 per cent during the first six months while the customs attained 42 per cent revenue collection against the overall revenue collection target throughout the fiscal year.
The government has set a Tk 430,000 crore target for FY24 – Tk 1,59,100 crore from VAT, Tk 1,54,800 crore from income and travel tax and Tk 1,16,100 crore from import and export duties.
