Tax revenue soars 22.65pc in March

DOULOT AKTER MALA | Wednesday, 28 April 2021

Tax revenue collection in the month of March registered a hefty 22.65 per cent growth despite Covid-19 pandemic thanks to a surge in import of goods.

According to data of the National Board of Revenue (NBR), import stage revenue grew by 46.97 per cent in that month.

Officials said China, the major source country for import, almost recovered from the blow of coronavirus pandemic, causing an impressive import growth.

Collection of Value Added Tax (VAT) also grew by 20.56 per cent, banking on large taxpayers.

However, income tax collection posted an 8.85 per cent growth last month.

The NBR data showed that internal tax revenue collection grew by 7.31 per cent in the first three quarters of the current fiscal year (FY), 2020-21.

The average revenue collection growth was 10.20 per cent in the last five years.

In July-March period, the NBR collected Tk 1.78 trillion tax revenue against its original target of Tk 2.27 trillion.

The government, meanwhile, revised the total tax revenue collection target to Tk 3.01 trillion from original Tk 3.30 trillion.

Talking to the FE, Md Anwar Hossain, director general of the NBR Research and Statistics Wing, expressed hope that the entity may reach close to its revised target despite the lockdown along with the surge of outbreak second wave.

As factories remained open and import of goods was increasing, the tax revenue collection might not face major blow this year, he said.

The ongoing lockdown might not affect import revenue, as letters of credit (L/C) for importing goods were already opened, he added.

Until March, all of the three wings of the NBR achieved moderate growths, which were negative last year.

Customs Wing collected 12.15 per cent higher revenue in this period compared to that of the corresponding period last year.

VAT collection grew by 5.13 per cent, while income tax grew by 5.59 per cent in July-March period.

However, the NBR is still lagging behind its original target by Tk 495.01 billion in this period.

To achieve the revised target, the tax collection authority will have to mobilize Tk 1.23 trillion more taxes in April-June period.

However, field-level officials said they might not be able to collect the expected volume of revenue due to the ongoing lockdown.

Dr Ahsan H Mansur, Executive Director of the Policy Research Institute (PRI), said its natural that revenue collection growth in the month of March and April would be impressive compared to that of the previous FY.

The country was almost shut in that period last year when Covid-19 hit first.

The businesses already learnt how to survive in the prolonged pandemic, he also said.

"There is no reason to get excited seeing the month-to-month hefty growth. The volume of revenue collection should be taken into consideration."

He projected that the actual revenue collection growth would be 1.0 or 2.0 per cent by the end of FY.

"As per my estimation, there might be a shortfall to the tune of Tk 400 billion against the revised target for the current FY," he noted.

April to June (last quarter of FY) is the peak time for revenue collection.

In the Q3 of the current FY, the NBR collected Tk 684.70 billion VAT, Tk 558.03 billion income tax, and Tk 539.88 billion export-import taxes.

In the month of March alone, the board collected Tk 84.83 billion VAT, Tk 89.51 billion income tax, and Tk 77.51 billion export-import taxes.

The government is likely to set Tk 3.30 trillion tax revenue collection target for upcoming FY, 2021-22.

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