The revenue board has identified several reasons behind missing target
The National Board of Revenue (NBR) has collected Tk38,453 crore in VAT, during the first half of the ongoing 2018-19 fiscal year, against a set target of Tk50,025 crore, according to the board’s data, lagging behind by Tk11,572 crore.
During an internal meeting held on December 23 to review and analyze key reasons behind the revenue collection shortfall, eight issues were identified, including changes in rates taken in the annual budget and uncollected VAT from Bangladesh Petroleum Corporation (BPC).
As of data available till December, the revenue board is short of Tk11,572 crore in VAT in the first half of 2018-19. Tk38,453 crore was collected in VAT against target of Tk50,025 crore.
Out of the Tk11,572 crore deficit, Tk11,000 crore alone is said to be in arrears by BPC, according to NBR sources.
The reasons also included low revenue collection from the gas sector, collected by the large taxpayers unit (LTU).
During the previous fiscal year, the LTU had collected Tk1,000 crore from the said sector.
Officials also presumed withdrawal of supplementary duty (SD) on gas may be another reason for low collection.
The recently-introduced integrated budget and accounting system (IBAS) was also blamed at the meeting for poor collection figures from government organizations.
Additionally, collection of VAT on construction and procurement at source was lower than expected.
The meeting, chaired by the NBR chairman Mosharraf Hossain Bhuiyan, has decided to put more importance in every wing—income tax, customs and VAT—to boost revenue collection.
Overall deficit
As per provisional data, NBR fell Tk28,000 crore or 33% short of target in first six months of ongoing fiscal year.
The authority has collected Tk98,028 crore in July-December against the collection target of Tk1,26,027 crore set for the period.
Of that, Tk30,819 crore was collected against the target of Tk40,570 crore in customs duty, Tk38,453 crore collected in VAT against target of Tk50,025 and Tk28,756 crore collected in income tax against the target of Tk35,433 crore during the time.
Former NBR chairman Muhammad Abdul Mazid told the Dhaka Tribune that the government expenditure is increasing though the revenue earning has not risen proportionately.
“For VAT, there are three reasons – reduction of VAT rates for many products bowing to pressure from different quarters, failure in implementing new VAT law, and failure in collecting pending revenue from other government organizations,” he said.
Many individuals and organisations are taking the issues to court, and thus cases remain pending for years, freezing the collection process, Mazid added, while also urging the government to identify mismanagement in the collection process to boost VAT collection.
NBR Member (VAT Policy) Md Rezaul Hasan said some of the government decisions are unfortunately against the interests of VAT collection.
“The new VAT law remain unimplemented as we are writing to government agencies for pending taxes, but to no avail. For example, BPC has not paid heed to our requests in collection of pending revenue yet,” he said.
Source: Dhaka Trribune.