Revenue grows 15.65% in Q1

The National Board of Revenue (NBR) earned Tk 67,104.45 crore in the first quarter of FY23, up 15.65 per cent compared to the same period in the last fiscal year.

But it saw negative growth in September, with its revenue amounting to Tk 26,833.93 crore in that month, down 3.01 per cent compared to the same time last year, provisional data shows. Besides, the revenue board was Tk 4,074 crore behind its target for the first quarter of FY23.

Experts said high commodity prices helped the NBR boost its revenue from local value added tax (VAT), which caused the overall revenue to grow.

Besides, the government’s austerity measures in releasing project funds and increasing letter of credit (LC) margins for luxurious products in the wake of dwindling forex reserves decreased imports, diminishing import and export revenues, they said.

Centre for Policy Dialogue Research Director Khondaker Golam Moazzem told The Business Post revenue grew due mainly to the increase in the prices of essential commodities.

It is inflation-induced growth marked by an increase in local VAT collection, he said.

But it is not a sustainable way to increase revenue because VAT collection would fall if the prices of oil, rice, and other essentials decline, he explained.

“Besides, though high prices increased VAT revenue, it would decrease consumption, which would then negatively impact VAT collection,” Moazzem said.

He further said creating new revenue sources and upgrading the NBR are the only ways to increase revenue sustainably.

Meanwhile, NBR officials said a budgetary amnesty for tax identification number (TIN) holders who have never filed their returns and making it mandatory to show proof of return submission for getting some essential services have caused return submission to increase, which helped direct tax revenue grow.

They also said ensuring accountability in VAT collection along with policy support to make VAT affordable and different mobilisation initiatives helped the overall revenue collection increase significantly.

But revenue collection was affected due to a downward trend in government project fund disbursement caused by global headwinds, they noted, terming it a big source of revenue.

The provisional data shows the NBR saw negative growth in export and import revenues in September. It earned Tk 2,358.42 crore less than the target for the month while its two other wings exceeded their targets.

During the first quarter of FY23, the NBR earned the highest revenue of Tk 24,546.65 crore from local VAT, followed by Tk 22,454.94 crore in import and export as well as Tk 20,102.86 crore in income and travel tax, while the targets were Tk 24,641.99 crore, Tk 25,043.85 crore, and Tk 21,493 crore respectively.

The provisional data shows in the first three months of the current financial year, export and import revenue grew by 16.55 per cent, local VAT by 16.37 per cent, and income and travel tax by 13.82 per cent compared to the same period in the previous fiscal year.

The data also shows local VAT revenue was 99.61 per cent of the target, followed by 93.53 per cent for income and travel tax and 89.66 per cent for import and export. The revenue authorities attained 94.28 per cent of the overall target during the first quarter.