NBR needs 2.5 times monthly average collection in June to hit revised target

Infographic: TBS

To meet its revised revenue target, in June the National Board of Revenue (NBR) has to collect more than two and a half times the amount it has averaged in each of 11 months of this fiscal year.

In July-May of the current fiscal year, the NBR has collected Tk324,378 crore, averaging Tk29,489 crore per month. So, to hit the revised target of Tk410,000 crore, the revenue authorities must earn a staggering Tk76,622 crore in this month alone.

According to NBR sources, revenue growth dipped below 9% year-on-year in May, marking the lowest in the last 11 months, mainly due to a sudden drop in value-added tax (VAT) collection.

However, the overall revenue collection growth was about 15%, which experts described as moderate but still short of the trend needed to reach the goal for the fiscal 2023-24.

"NBR's revenue collection growth is moderate, not bad considering the current economic situation. Despite about 15% growth, there may be a large gap with the revenue target for the FY24," Towfiqul Islam Khan, senior research fellow at the Centre for Policy Dialogue, told The Business Standard.

"The finance ministry has set huge revenue targets without considering the capacity or reality of the NBR, which is one of the main reasons behind the huge gap between target and collection."

In the budget for the outgoing fiscal year, the total revenue target for NBR and non-NBR was set at Tk5 lakh crore, with Tk4.30 lakh crore allocated to the revenue board. 

In December last year, the CPD estimated a shortfall of about Tk80,000 crore in collection.

Subsequently, due to the inability to meet the target, it was revised down to Tk4.78 lakh crore, with Tk4.10 lakh crore allocated to the NBR.

But economists believe that even the revised target is not achievable. 

Ahsan H Mansur, executive director of the Policy Research Institute, told TBS, "NBR's revenue may fall short by around Tk40,000 crore of the target." 

According to an NBR source, in May, the NBR collected over Tk35,000 crore, with 8.97% growth, the lowest in the last 11 months.

Sources indicate that the lower growth is attributed to a decline in VAT collections, which saw a decrease of over 1%. However, import tax collection growth was satisfactory, at over 29% in May.

About 90% of the country's import tax is collected through the Chattogram Custom House. Customs sources said imports rose by 1.4% in the last 11 months compared to the equivalent period in the previous fiscal year, with realisations increasing by 13%.

Mohammad Fyzur Rahman, commissioner of the Chattogram Custom House, told TBS, "The revenue target was achieved last May as well, which is a rare occurrence. He attributes this to strong monitoring in valuation and assessment at the import stage."

However, Towfiqul Islam Khan sees currency devaluation as a major reason for the significant increase in import tax collection. 

Additionally, he attributes the relatively good growth in revenue collection to the increase in the prices of goods in the local market and the implementation of the new income tax law.