• Monday, July 28, 2014

Tax receipts rise in April, full year off the target

Sohel Parvez

The tax authority saw a rise in revenue receipts in April than a month ago due to increased monitoring and a steady recovery of the economy from political unrest.
In April, tax collection went up 15 percent year-on-year to Tk 11,541 crore, thanks a higher flow of taxes from domestic and external trade related sources.
In March, tax grew only 6 percent year-on-year.
The overall collection rose 9.16 percent year-on-year to Tk 90,704 crore in July-April of the current fiscal year, according to National Board of Revenue.
However, despite an improvement, the NBR is unlikely to achieve its revised collection target of Tk 125,000 crore by the end of fiscal 2013-14, analysts said yesterday.
Another Tk 34,296 crore will have to be collected in the rest two months to achieve the target, which Ahsan H Mansur, executive director of Policy Research Institute (PRI), said may not be doable. The receipts may not cross Tk 120,000 crore by June 30, he said, adding that revenue collection will rise in the last two months but the overall annual growth might be less than 12 percent.  
Revenue collection, which grew at 20 percent in recent years, had begun to slow since the second quarter of the current fiscal year due to sluggish investment and economic activities amid political unrest.
Taxmen said, though the economy is recovering gradually, investments and domestic demands are yet to pick up.
"Revenue collection is unlikely to grow faster unless the economy gets some vigour," Mansur said.
"We have increased our monitoring, particularly to ensure collection of withholding tax and those from individuals," an NBR official said, asking not to be named.
The revenue receipts have increased due to intensive monitoring, he said. Revenue officials also beefed up efforts to collect VAT at source, expedite settlement of court cases, realise dues and increase scrutiny to curb evasion.
According to the NBR, VAT and supplementary duty from domestic sources grew 13.48 percent to Tk 34,388 crore during July-April from that in the same period a year ago.
Income tax collection rose 12.47 percent year-on-year to Tk 29,182 crore. Receipts from customs or overseas trade edged up 1.14 percent to Tk 26,641 crore during the period due to a steady rise in imports. Towfiqul Islam Khan, a research fellow at the Centre for Policy Dialogue, said revenue receipts might increase to some extent in the remaining two months of the fiscal year owing to increased imports.
However, income tax, VAT and other duties at the domestic level are unlikely to grow at a faster rate, he said.
The revenue collection shortfall against the target may be Tk 4,000 crore to Tk 5,000 crore, he said.
"The government should take cognisance of the shortfall while setting the fiscal targets for the next fiscal year," he said.
The government may raise the revenue collection target by 20 percent to Tk 149,720 crore for the upcoming year from the revised target of the outgoing year.
Mansur of the PRI said the revenue collection shortfall would affect budgetary expenditures. "It will be difficult to meet the budgetary targets due to a dearth of fund."
"'Investments have to be increased. The government should speed up efforts to execute priority projects, including establishing special economic zones to attract investment, and bring dynamism in the economy," he said.

 

Published: 12:01 am Sunday, June 01, 2014

Last modified: 11:16 pm Saturday, May 31, 2014

TAGS: Centre for Policy Dialogue tax authority political unrest. National Board of Revenue. economic activities

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