Revenue collection in slow lane amid blockade

Tax collection has started slowing down as a result of the dragging political turmoil, now nearing three months -- a development which has made the NBR's task of meeting the government's ambitious revenue target even harder.

In February, the country realised Tk 10,130 crore in taxes, down almost 6.5 percent from the previous month, according to data from the National Board of Revenue.

In January, the collections slipped 4.86 percent from its previous month to Tk 10, 785 crore. 

The government has set out to collect Tk 149,720 crore from taxes in fiscal 2014-15, which is 35 percent higher than the previous year's actual collection.

Normally, revenue collection gradually picks up after the first half of the fiscal year to reach its peak in the last three months. But in the current fiscal year, the scenario seems unlikely, as tax receipts have been on a downward trend since December.  

This has prompted officials working on the revised budget and next year's one to express concerns over the revenue mobilisation targets.

The country, however, realised Tk 79,978.72 crore in the first eight months of the fiscal year, up 16.42 percent year-on-year.

The growth in revenue collection was driven mainly by tax collected at local levels, which has been hit by blockades since January 6 this year. 

Between July last year and February this year, value-added taxes and supplementary duties, paid by local businesses and industries, grew 17.32 percent, while income taxes paid by individuals rose 17.76 percent.

Income from import duties grew 13.57 percent in the same period.

The slowdown in revenue collection could validate deep-rooted assumptions by businesses, economists as well as the government that the economy has been hit hard by the blockades, the longest in the country's history.

The blockades and violence badly hit farm incomes, disrupted inter-district road and rail transport and pushed food inflation up.

Small businesses, handlooms and boutiques that are dotted across the country but rely on Dhaka and other major cities to buy and sell their products have counted huge losses. Various business chambers and associations have come up with different figures on the economy's loss during the blockade.

Every day, the economy lost about Tk 2,277.86 crore alone due to the blockades and the strikes. The amount would stand at Tk 2,500 crore if the daily loss is calculated by taking into account the 25 percent loss in total industrial production, said Dhaka Chamber of Commerce and Industry.

Prime Minister Sheikh Hasina said the country had incurred a loss of over Tk 1.2 lakh crore in the first 52 days of the unrest.

Finance Minister AMA Muhith also said the target for the gross domestic product would be revised down for the current fiscal year because of the political unrest.

The development partners have already trimmed their growth targets for 2014-15.