The Financial Express

Tk 276b shortfall in NBR's tax earning in five months

| Updated: December 31, 2020 10:36:33

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The revenue authority faced a Tk 275.56 billion shortfall in tax collection until November of the current fiscal year against its target due to sluggish economic activities amid the Covid-19 pandemic.

Tax collection registered a minuscule 1.18 per cent growth, compared with the corresponding period of the last year after showing a 4.41 per cent growth in the first quarter (July-September). Last year, the NBR achieved 6.19 per cent growth in the same period.

According to the provisional data of the National Board of Revenue (NBR), the tax authority collected Tk 854.03 billion taxes in the July-November period, up Tk 844.04 billion in the same period last year.

In November, the NBR's tax collection declined by 7.10 per cent compared with the same month last year.

Until November, the target for NBR was Tk 1.12 trillion.

However, officials are optimistic, saying the growth is a positive sign amid the coronavirus pandemic.

That bullishness was reflected in comments made by NBR chairman Abu Hena Md Rahmatul Muneem who on Wednesday said the board has been able to collect higher tax revenue compared to that of the previous year, despite Covid-19.

Economists, however, suggested the NBR intensify monitoring, plugging the holes in tax evasion, proper enforcement of the law, and automation to minimise the revenue shortfall.

Former finance adviser to the caretaker government Dr A. B Mirza Azzizul Islam said revenue collection is related to the economic activities, which have slowed down and lowered GDP growth.

NBR activities have also faced setbacks, such as suspension of tax fair and individualised monitoring to increase tax collection, he said.

He laid emphasis on the enforcement of the tax law, including increasing the number of tax return filers.

The number of e-TIN holders is more than double the actual tax return filers, he said.

Dr Fahmida Khatun, executive director of the Centre for Policy Dialogue, said domestic revenue mobilisation is the only way to salvage the Covid-hit economy.

She said every year, the NBR faces shortfall because its target is not set practically and COVID has aggravated the shortfall this year.

He said income of both individuals and businesses has declined in this pandemic affecting revenue collection.

She stressed the need for intensifying monitoring of tax avoidance, focusing on capacity building, technology use while ensuring a taxpayers-friendly environment addressing the fear factor.

According to NBR data, VAT collection showed a negative 5.21 per cent growth in the July-November period of the three wings.

Talking to the FE, a senior NBR official said the VAT collection figure will be finally compiled after the 25th of December as the time for tax return submission has been extended.

He said VAT collection will rise further contributing to the higher growth against what came in the provisional figure.

Until November, the NBR collected Tk 316.93 billion VAT against its target for Tk 425.28 billion.

The VAT wing faced the highest shortfall of Tk 108.34 billion among the three wings of NBR.

The income tax wing also posted a poor 4.22 per cent growth as many of the individual taxpayers have yet to submit their tax returns.

To help taxpayers, the NBR extended the deadline for tax returns submission until December 31, from November 30, 2020.

The income tax wing faced a Tk 62 billion shortfall against its target.

The customs wing also faced a Tk 104.85 billion shortfall against its target of Tk 277.76 billion revenue in the July-November period.

In the current fiscal, the government has set a Tk 3.30 trillion tax collection target for the NBR expecting nearly 40 per cent growth over the corresponding period.

During the last five years, the average revenue collection growth was 10.20 per cent.

In November, the VAT collection slumped by 24.43 per cent while the income tax wing posted a meagre 1.29 per cent and the customs wing 10.58 per cent growth.

The NBR collected Tk 172.75 billion tax revenue in November alone, leaving a Tk 86.83 billion shortfall against the target of Tk 259.58 billion.

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