NBR needs Tk89,224cr in June to meet target

The National Board of Revenue (NBR) will have to collect Tk 89,224 crore in the month of June this year to achieve its revenue target of Tk 3,70,000 crore set for the fiscal year 2022-23.

In the first 11 months of the current fiscal year, the revenue collection target for NBR was Tk 3,14,933 crore, but the board collected around Tk 2,80,776 crore during the period.

Accordingly, the amount of revenue shortfall has stood at Tk 34,158 crore, putting pressure on the revenue board to meet an unattainable target in a single month, provisional statistics of the NBR showed.

Due to government’s austerity measures in releasing funds for the projects and a downtrend in imports caused by L/C opening crisis amidst forex crunch as well as soaring inflation, the overall revenue collection has declined during the period, NBR officials say.

Besides, due to high inflation in the country, the growth in VAT collection is slightly better while the revenue collection at import-export stage sees a lesser growth.

The board collected Tk 30,481 crore in May, helping to grow up by 11 per cent of the overall revenue collection during the July-May period of the current FY, comparing to the same period last FY.

According to the latest report of Bangladesh Bureau of Statistics (BBS), the monthly inflation rate in May soared to 9.94 per cent, a decade-high, up from 9.24 per cent in the previous month, as people in both rural and urban areas are buying food and non-food items at higher prices.

However, the government set a target for the NBR to collect revenue of Tk 4,30,000 crore in FY24, up by 16 per cent or about Tk 60,000 crore from FY23.

So, if the revenue deficit widens to around Tk 40,000 crore, the NBR will have to collect more than 25 per cent tax and duties in FY24 than the current fiscal year. But the board could never achieve such growth.

A report prepared by the NBR for the International Monetary Fund (IMF) also showed such concern regarding the revenue collection in FY24.

“In FY23, imports are already showing a negative trend which poses a threat to VAT and import revenue,” the report says.

“So, the stability of raw material imports and consumable items by tackling the forex crunch, and ensuring uninterrupted fuel supply to keep production running are a must to successfully collect the projected revenue,” it added.

It also said that about 40 per cent of total VAT revenue comes from the country’s production sector, and about 5 per cent comes from the trade sector.

VAT in the production sector is mostly dependent on imported raw materials whereas revenue from the trade sector is dependent on imports of consumable items, as well as production of goods.

Besides, the downtrend in imports had already showed a lesser growth in revenue collection. During the July-May period of this FY, the revenue board witnessed 4 per cent growth, the lowest among the three stages, in import and export stage comparing to the same period of last fiscal year.