NBR chairman asks officials to meet revenue targets anyhow

National Board of Revenue (NBR) Chairman Abu Hena Md Rahmatul Muneem has directed officials to achieve the collection target outlined in the national budget regardless of the business situation.

During a meeting with field-level customs and VAT officers from across the country on Thursday to discuss the present state of revenue collection, the NBR chairman emphasised that the growth in VAT collection should not fall below 20% each month, sources said.

Muneem believes that 20% to 30% growth in revenue collection is possible if inefficiencies are eliminated at the field level, said the sources.

A commissioner at the field level who was present at the meeting told The Business Standard on condition of anonymity, "A monthly growth rate of at least 20% in VAT collection has been mandated. Regardless of the economic conditions or business circumstances, any [field-level] office failing to meet this rate will be held accountable."

According to NBR data, VAT collection witnessed a growth of about 15% last year. However, the average growth over the past five years has been 11%. The increase in customs collection has been comparatively smaller.

A revenue target of Tk4.3 lakh crore has been fixed for the current financial year, in which the growth should be around 30%.

Numerous industries, including garments, textiles, cement, steel, and banking, are experiencing a slowdown due to high inflation and decreased consumer spending. The dollar crisis and nearly 25% devaluation of the taka over the past year have contributed to reduced consumer spending.

Given the current situation, some traders speculate that the NBR's determination to boost revenue might exert additional pressure on them.

Abul Kasem Khan, former president of the Dhaka Chamber of Commerce and Industry (DCCI), said, "We are also in favour of enhancing revenue collection. However, it would not be prudent to escalate pressure on all parties, particularly those who are compliant. Given the ongoing economic slowdown, it's crucial to take this into account."

SM Nazer Hossain, vice president of the Consumer Association of Bangladesh (CAB), warned that this pressure would likely burden businesspeople and eventually impact consumers. 

He shared his perspective with TBS, saying, "Heightened VAT rates will translate to added pressure on consumers. With inflation already affecting people's finances, this will exacerbate the problem."

NBR field-level officials are of the opinion that they might have no alternative but to intensify pressure on traders to secure additional VAT.

These officials are also concerned about meeting the ambitious revenue target set for the ongoing fiscal 2023-24.

Factors such as economic deceleration, challenges in fulfilling import-related LC requirements, and political uncertainty are anticipated to pose obstacles to revenue collection in the upcoming months.