NBR Revenue Shortfall Hits Tk 41,879cr in First Quarter

The National Board of Revenue (NBR) collected Tk 92,517 crore in the first three months of the current fiscal year, leaving a shortfall of Tk 41,879 crore against its target. Revenue collection grew by just 1.23 per cent year on year, raising concerns about the NBR’s ability to meet its annual target of more than Tk 6 lakh crore.

The NBR’s revenue collection remained slow in the first quarter of the current fiscal year, with the shortfall reaching nearly Tk 42,000 crore, according to data from the revenue authority.

The NBR collected Tk 92,517 crore between July and September, against a target of Tk 1,34,396 crore. The amount was only 1.23 per cent higher than the collection in the same period of the previous fiscal year.

Value Added Tax (VAT) recorded the biggest shortfall among the three main sources of revenue. The NBR collected Tk 29,348 crore from VAT against a target of Tk 49,405 crore, leaving a gap of Tk 20,057 crore.

NBR officials partly blamed the fall on a change in the VAT return filing system. Under the revised rule, businesses were allowed to submit VAT returns every three months instead of every month.

Officials said many businesses did not submit their returns in July and August. As a result, VAT collection fell in September.

The government restored monthly VAT return filing earlier this month amid concerns over revenue collection and problems with the new system.

However, officials said the change in VAT rules was not the only reason for the shortfall. They also pointed to weak management at the NBR and a lack of activity among field-level officials.

Income tax and travel tax collection performed better than VAT. The NBR collected Tk 33,040 crore from these sources, up nearly 17 per cent from a year earlier. However, the amount was Tk 9,686 crore below the target of Tk 42,726 crore.

Revenue from customs duties and taxes on imports and exports also increased. Collection from this sector rose by around 7.5 per cent to Tk 30,129 crore. But it remained Tk 12,135 crore below the target of Tk 42,265 crore.

The figures show that all three main sources of revenue fell short of their targets in the first quarter.

Professor Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue (CPD), said that the change in VAT return filing rules was not the only reason for the fall in revenue collection.

He said slow investment, lower bank lending and slow progress in implementing the Annual Development Programme (ADP) had also affected revenue collection. As development projects moved slowly, the government was also collecting less VAT and tax from these activities.

He added that several economic indicators were showing signs of a slowdown. To achieve its revenue growth target, the NBR would need to work with greater effort and improve its activities.

The weak performance has raised concerns about whether the NBR can meet its annual revenue target of more than Tk 6 lakh crore. Meeting the target will require a much faster pace of collection in the remaining nine months of the fiscal year.