Tax revenue collection started gaining momentum gradually after the Covid-19 pandemic fallout, posting 4.11 per cent growth in the first quarter (Q1) of the current fiscal year (FY), 2020-21, compared to that of the corresponding period last year.
In the month of September, the National Board of Revenue (NBR) achieved 10.76 per cent growth in revenue collection, compared to that of the matching period last year.
Revenue collection growth was 7.85 per in the month of August. However, the NBR posted a negative growth of 6.77 per cent in revenue collection in the month of July.
Of its three wings, VAT Wing posted 1.19 per cent growth, Customs Wing 6.78 per cent, and Income Tax Wing 4.92 per cent in July-September period.
The NBR collected an aggregate amount of revenue worth Tk 499.89 billion in Q1 against Tk 480.17 billion in the same period last year, according to its provisional data.
However, the agency faced a shortfall of Tk 137.24 billion against its target, set for the first three months of the current FY.
Officials said the ambitious target is the main reason behind the shortfall in tax revenue collection. In Q1, the government has set a target of Tk 637.13 billion for the NBR.
Talking to the FE, a senior official said the revenue collection started posting a modest growth from the month of August, as economic activities gained momentum following a sluggish trend of Covid pandemic.
In July-August period, the revenue collection growth was 0.16 per cent.
He said import of luxury goods also increased in Q1, contributing to the higher growth of customs and income tax wings, among the three wings of the NBR.
The Income Tax Wing fetches a significant part of revenue as Advance Income Tax (AIT) that the NBR collects at import stage.
In September, customs duty collection posted 10.76 per cent growth, while income tax 13.63 per cent growth.
The government has set an ambitious target of Tk 3.30 trillion for the NBR in the current FY.
The NBR would have to achieve 48 per cent growth over the last year’s actual collection of Tk 2.23 trillion for achieving the target.
According to its statistics, average revenue collection growth was 10.20 per cent in the last five years.
Officials said achieving such a higher growth in revenue collection is not possible in the existing economic scenario.
They, however, expect a moderate growth in revenue collection in the coming months unless the much-talked-about second wave of Covid-19 pandemic hits the country in winter.
According to the provisional data, the NBR collected Tk 181.11 billion in VAT, Tk 159.59 billion in customs duty, and Tk 159.20 in income tax in Q1.
However, all of the three wings missed their respective targets in that period – customs by Tk 58.48 billion, VAT by Tk 50.86 billion, and income tax by Tk 27.91 billion.
In September, the NBR collected Tk 198.30 billion against its collection target of Tk 229.12 billion.
Officials said the income tax collection will grow in the coming months, as the last date for submission of individual tax returns is November 30. Some 2.2 million taxpayers submitted tax returns last year.
They eye a significant increase in tax return filing this year, as the NBR has made it mandatory for all TIN-holders from the current FY.