Tax collection growth slowed in the first quarter of the fiscal year due to a decline in the flow of value-added tax (VAT) from domestic economic activities and decline in import tariff, according to data released by the National Board of Revenue (NBR).
Overall, revenue collection grew 2.62 percent year-on-year to Tk 47,388 crore between the months of July and September thanks to an 11 percent growth in income tax receipts during the period.
Yet, the NBR missed its target of Tk 62,294 crore for the period by almost Tk 15,000 crore.
Revenue officials linked the sluggish growth in collection to delays in adoption of the new VAT law by businesses because of changes in the accounting system and definition of rebate.
Decline in collection of VAT from cigarettes, one of the biggest sources of revenue, and imports were also blamed.
“A section of smokers switched to low-end segment of cigarettes after the hike in prices of mid-price cigarette at the beginning of the fiscal year. This has affected VAT receipts from this sector,” said a senior official of the NBR.
During the period, collection from VAT, the biggest revenue source, declined one percent year-on-year to Tk 17,373 crore.
The overall fall in imports affected the collection of tariffs from overseas trade activities, said M Fakhrul Alam, commissioner of Customs House at Chattogram.
“We see low imports of mobile handset, electronics and cars,” he said.
Imports declined 2.54 percent year-on-year to $14,324 million in the July-September period, according to data from Bangladesh Bank.
The import of completely knocked down (CKD) units of vehicles increased this fiscal year, Alam said.
As these items do not have high duty, collection from the area was lower. Besides, import of CKD units of motorbike also dropped as a number of firms are making bikes here.
Imports of petroleum dropped while imports of liquefied natural gas and liquefied petroleum gas increased.
The import of edible oil dipped as some firms were importing soybean seeds.
Meanwhile, the NBR logged Tk 311.85 crore on the fifth day of tax fair taking place in all divisional cities and districts. The fifth day’s collection was 10 percent higher than that of the previous day.
Overall, taxmen got Tk 1,658.65 crore in the first five days of the fair. Some 4.20 lakh tax returns were submitted at the fair, said a press release.