Al Amin :
The National Board of Revenue (NBR) faces a significant challenge as it must collect over Tk 1.20 lakh crore in the remaining two months (May-June) to achieve its annual target.
The NBR has revised its tax collection target to Tk 4.10 lakh crore for the current fiscal year. However, the revenue board has managed to collect only Tk 2.89 lakh crore in the first ten months (July-April) of the fiscal year 2023-24.
According to provisional data from the NBR, the public exchequer earned Tk 2,89,376 crore against the 10-month target of Tk 3,13,583 crore. This leaves the NBR trailing its target by Tk 24,207 crore, or 29.42% less than the target.
Despite this shortfall, the NBR has achieved a robust growth rate of 15.61% in tax collection during this period. Data shows that the income tax wing contributed Tk 93,145 crore, marking a 19.33% year-on-year growth.
Officials attribute this growth to increased earnings from tax deducted at source and arrears in recent months.
The Value-Added Tax (VAT) wing collected Tk 1,13,709 crore, reflecting a 16.01% year-on-year growth.
Additionally, customs duty receipts amounted to Tk 93,357 crore, showing an 11-18% year-on-year growth.
Dr. Zahid Hussain, former lead economist of the World Bank’s Dhaka office, warned, “NBR will obviously face a big revenue collection shortfall at the end of the year if the current pace continues in the next two months.”
He noted the lack of visible institutional efforts to curb tax evasion and the slow implementation of reforms and digitalisation as significant hurdles.
He further cited the International Monetary Fund’s (IMF) conditionalities, which require increasing revenue collection by 0.5 percentage points annually. He pointed out that the NBR is focusing on collecting taxes from easy sources to meet these conditions.
In a recent report, the World Bank stated that Bangladesh could potentially triple its VAT revenues by addressing policy and compliance gaps. The country’s revenue as a share of GDP is currently 8.2%, among the lowest globally and significantly below its peers.
The World Bank identified three primary bottlenecks in revenue collection: tax evasion, tax exemptions, and various para-tariffs on trade and commerce.
The Washington-based lending firm recommended reducing para-tariffs as part of the preparation for LDC graduation, rationalising tax rebates, and enhancing the capacity of the tax administration.