The Financial Express

July revenue collection falls 22pc

VAT wing faces the biggest blow

| Updated: August 17, 2020 09:29:29

Lankabangla and Fianancial Express Lankabangla and Fianancial Express
Illustrative photo Illustrative photo

The overall revenue collection fell by 22.07 per cent to only Tk 123.34 billion in July last, the first month of the current fiscal year (FY), as compared to that of the same month of last year, according to the latest NBR data.

In the same month last year, the National Board of Revenue (NBR) had collected Tk 158.28 billion in revenue.

It also fell by Tk 70.44 billion short of the month's target of Tk 193.78 billion.

All the three wings of the NBR fell behind the respective targets, indicating that the ambitious target of Tk 3.30 trillion for the current fiscal year would be difficult to achieve.

The VAT wing witnessed the biggest blow among the three wings of the NBR in the first month of FY 2020-21.

The collection of value added tax (VAT) declined by 39.56 per cent to Tk 37.35 billion in July last as compared to the corresponding period of last FY.

In the same month last year, the VAT wing had collected only TK 61. 81 billion in VAT from the local sources. The collection is also less than half of the month's target of Tk 77.32 billion.

The income tax wing collected Tk 36.70 billion against its monthly target of Tk 42.19 billion, posting a 15.54 per cent negative growth.

Customs wing collected Tk 49.29 billion against its target of Tk 74.27 billion, the growth of which declined by 7.02 per cent.

Businesses, however, said that although the shopping malls and other economic activities re-opened despite the Covid-19 pandemic, people were still shaky about moving like the previous way.

The sales in the shopping malls were not going on at the expected level to generate consumption taxes, they said.

Solaiman Parsee Faisal, a businessman in the city's old Dhaka, said that all of the shops opened in this area, but consumers were not coming like before.

He said the complexities in the VAT online system and non-cooperation of some VAT officials were also discouraging some businesses to obtain the VAT registration.

Mr. Faisal is an adviser of VAT and taxes to the Bangladesh Pipe and Tube Well Merchant Association.

He said the VAT collection might fall further due to complex calculation method in the new system as businesses in this area do not understand the process.

Submission of VAT returns through online and obtaining VAT registration sometimes get troublesome due to non-cooperation of the field-level VAT officials, businesses alleged.

However, VAT officials said they were trying to popularize the online VAT system which might initially lead to decrease in the VAT collection, but it would ultimately plug the holes to VAT leakage.

Project Director of the VAT Online Project Kazi Mustafizur Rahman said they would gradually bring all the VAT payers under the online system.

"All of the businesses will submit their VAT return through online soon. Already, more than 45,000 of the businesses are submitting online VAT returns," he added.

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