Import level tax waivers offered by the National Board of Revenue (NBR) experienced a significant decline of 23.82 per cent to Tk 12,073 crore in the July-September period of the fiscal year 2023-24 compared to the same period of the previous fiscal year.
This decline of Tk 3,777 crore is attributed to the government's austerity measures and a downward trend in overall imports.
Tax waivers are granted to export-oriented companies, manufacturing industries, capital machinery imports, Rooppur Nuclear Power Plant, power grid companies, and producers of essential commodities such as poultry to maintain affordable prices for consumers.
According to the latest NBR statistics, the revenue board also provided exemption facilities to mobile manufacturers, freeze and AC manufacturers, and other manufacturers to facilitate the import of raw materials.
In July-September, the country imported goods worth $14.74 billion, down by 23.77 per cent from $19.34 billion same corresponding period last FY.
The NBR collected Tk 76,751.30 crore during the first quarter of the current fiscal year, falling short of its target of Tk 84,946.93 crore for the July-September period by Tk 8,195.63 crore, according to provisional data.
It is noteworthy that with the International Monetary Fund (IMF) conditions attached to the recently approved $4.7 billion loan for Bangladesh, the NBR is mandated to increase the country's tax-to-GDP ratio and reduce tax waivers in an effort to boost tax revenue.
The IMF has stipulated conditions to increase the tax-to-GDP ratio by 0.5 percentage points in FY24, followed by 0.5 and 0.7 percentage points in FY25 and FY26, respectively. To achieve this target, the NBR will need to collect an additional Tk 2,34,000 crore over the next three fiscal years.
The government has also set a revenue collection target of Tk 430,000 crore 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.
Most exempted sources
During the period, most exemption of Tk 2,208 crore is provided to capital machinery imports, followed by Tk 1,548 crore on advance tax, Tk 1,160 crore to Rooppur Nuclear Power Plant, Tk 848 crore to defence store and Tk 655 crore on special exemption on such goods where total tax is zero.
The NBR provided Tk 527 crore waiver to mobile manufacturers, Tk 509 crore on raw materials imports, Tk 284 crore to textile, Tk 280 crore to poultry farms, Tk 148 crore to Bangladesh Economic Zones Authority (BEZA), Tk 104 crore to power grid companies.
Meanwhile, Tk 71 crore to freeze and AC manufacturers, Tk 34 crore VAT on edible oil and Tk 27 crore on relief goods.
Besides, NBR gave Tk 209 crore exemption on limestone imports which was not provided in the first quarter of the previous fiscal year.
The board withdrew the supplementary duty on limestone to ensure low-cost infrastructural development in the country in May. While importing limestone, the traders paid a 30 per cent SD till the decision.
