Collection target in income tax sector has been slashed as concern grows over profit in the major sectors
The finance minister has set a revenue target of Tk330,000 crore for the financial year 2020-21, which is 10 percent higher than the current year's revised target of the National Board of Revenue (NBR).
NBR Chairman Abu Hena Rahmatul Muneem recently told the finance secretary the NBR would face a Tk75,000 crore deficit for the current fiscal year from the revised target of Tk300,600 crore.
Based on the latest available data, economists said the revenue shortfall for the current fiscal year against the original target has been re-estimated at around Tk125,000 crore. If the government falls short of its revenue target for the current fiscal year by this huge sum, it will be impossible for it to achieve a 56.2 percent growth in revenue collection in FY21.
In this situation, economists have commented that the target for the next financial year is highly unrealistic.
Centre For Policy Dialogue Distinguished Fellow Dr Mustafizur Rahman said the government's target of attaining a 56 percent growth target in revenue collection is completely unrealistic.
According to budget data, a target to raise Tk3.30 trillion in taxes through the revenue authority has been set in a targeted national budget of Tk5.68 trillion for the fiscal year 2020-21.
The fresh target is 10 percent more than the revised target for the current fiscal year. Among the NBR targets, Tk1.28 trillion will be collected from the VAT sector, Tk1.05 trillion from the income tax sector and Tk96,000 crore from the customs.
The VAT sector will provide 38.78 percent of the total revenue collection while VAT collection target is 36.11 percent against the total revenue collection in the current fiscal year.
The income tax collection target has been set at 31.81 percent against the total collection while it is 35.50 percent in the current fiscal year.
The revenue collection target from VAT and customs has been set at Tk2.27 trillion – nearly 70 percent of the total collection target. However, the amount in current fiscal year is 64.5 percent of the total revenue collection.
Meanwhile, NBR sources said that collection target in income tax sector has been slashed as concern grows over profit in the major sectors.
The revenue collection target was set at Tk3.25 trillion with 33 percent growth than the current year. The target was revised to Tk3 trillion.
The NBR collected Tk1.65 trillion with eight percent growth in the first nine months of the current fiscal year. The tax authority collected Tk2.23 trillion in 2018-19 fiscal year.