Revenue collection growth falls YoY in November

The country's internal revenue collection growth in the current fiscal registered a declining trend, rising by 9% in November. In the fiscal 2021-22, the average was about 16%.

Sources at the National Board of Revenue (NBR) said the tax collection in November was also slightly less than in October.

Besides, the NBR's target growth for November also fell by 12%.

According to NBR sources, last November the agency collected Tk24,703 crore against the target of Tk28,28 crore. 

Customs duty and tax collection at the import level during the month under discussion increased by less than 9% compared to November last year. 

But in November of the financial year 2021-22, this growth was about 26%.

A senior official of NBR's Customs Department, on condition of anonymity, told The Business Standard (TBS), "The NBR has increased the regulatory duty to discourage the import of several products and banks have reduced the opening of letters of credit [LC] for imports, resulting in lower duty collection."

Asked whether the situation will change in the coming months, he said, "The central bank governor said imports may increase from December. We too are counting on that."

Business leaders, however, said that even in this month, the complications in LC opening have not ended.

Mostafa Azad Chowdhury Babu, senior vice-president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), told TBS, "LC opening is not easy yet. To open an LC of $30,000, you have to get approval from the bank's head office. Recently, we requested the central bank to look into this. It said if necessary, imports can be made through deferred payment. But due to a resulting image crisis, that will not be possible."

If imports do not increase, revenue collection will not increase. The growth seen now is mainly due to higher prices of imported goods and the devaluation of the taka against the dollar.

A business leader, requesting anonymity, told The Business Standard that revenue collection is on the decline as the pace of the economy is somewhat sluggish. Besides, the revenue payment process of income tax, VAT and customs is still complicated.

There is also harassment by NBR officials at the field level. Some officers go into negotiations with businessmen to fill their own pockets, which do not go to the Government Exchequer, he alleged.

According to NBR's provisional estimates, the growth in income tax collection in November was less than 1%. Tax collection at the import stage increased by less than 9% and VAT collection at the local stage increased by about 16%.

Explaining why the growth was low, NBR member Shaheen Akhter told TBS that the bulk of income tax comes from companies. Due to the extension of one month in the tax return filing period in November, many returns were not filed, and as a result, the tax did not arrive on time.

However, it was hoped the trend would improve in December.

In the current financial year, the NBR's revenue collection target is Tk370,000 crore. According to the NBR's preliminary estimates, it has collected Tk115,621 crore against the target of Tk125,334 crore in the five months last July to November, which is a growth of a little over 13%. The growth was over 16% in the same period last fiscal.