VAT income falls for less consumption!

A massive drop in consumption and purchasing capacity of consumers due to price hike of daily essentials seem to have caused slow revenue growth in Value Added Tax (VAT) at local level.

According to the latest data of the National Board of Revenue, the revenue board collected around Tk6, 300 crore in VAT at local level for the month of July this year. This is a 10.56 percent growth compared to the same period of the previous year.

The collected revenue from the head was Tk1, 914 crore less than the actual target of Tk8, 214 crore for the month, achieving only 76.69 percent of the monthly target.

The data shows a maximum shortfall in VAT collection compared to other revenue earning heads.

Officials concerned have attributed less consumption and spending to the less than expected revenue from the head of Vat revenue.

“Less spending that resulted in less production for local consumption is the ultimate reason for the tepid growth,” a senior NBR official told The Business Post.

It also shows a shortfall in tax and travel revenues. The amount collected by NBR in these two heads was Tk4, 732 crore, or 83.49 per cent of the monthly target of Tk5, 668 crore.

However, the NBR saw a huge revenue growth from customs duty. It collected Tk6, 766 crore, up by Tk62 crore from its monthly target, and 37.68 percent growth compared to the same period of last year.

It hit around 16 percent growth in overall revenue in July this year compared to the corresponding period of the FY22.

NBR collected Tk17, 798 crore in the month while the shortfall was near about Tk2, 800 crore from its monthly target.

NBR Chairman Abu Hena Md Rahmatul Muneem directed field officers to be strict about revenue collection.

He made the remarks on Thursday while presenting review of the revenue at the conference with customs cadre officials in its head office, meeting sources confirmed.

Without harassing tax payers the revenue collection activities should proceed in a simple way, he said stressing the need for taking proper strategies to achieve monthly target, source add.