Income tax collection falls Tk9,180cr short of target in FY23

In spite of taking multiple initiatives to boost income tax in FY23, the collection was Tk9,180 crore less than the target due to economic slowdown, according to sources at the National Board of Revenue.

The revenue board set a target of collecting Tk3.70 lakh crore in revenue in FY23, of which income tax and travel tax accounted for about Tk1.22 lakh crore. But, Tk1.12 lakh crore could be collected in income tax by the end of FY23. The growth in this regard was around 11% compared to FY22.

Even though the target remained unmet, experts consider the growth in income tax collection a positive achievement in the current economic situation.

"The growth in income tax collection in spite of the economic slowdown is satisfactory," Dr Muhammad Abdul Mazid, a former chairman of the NBR, told The Business Standard.

He said, "In previous years, the government downsized its revenue target for a fiscal year through revision before announcing the next budget, but this year they did not do it. If the target was reduced, there might not have been any shortfall. So, considering the overall situation, the achievement is not bad."

A review of the NBR's income tax collection statistics showed that in the first 10 months (July 2022 to April 2023) of FY23, the average monthly tax collection was Tk7,800 crore. For the last two months, however, it was close to Tk17,500 crore.

Usually, more revenue is collected in the last months of a fiscal year, but the jump in revenue collection in the last two months of FY23 was higher compared to that in the previous years.

A senior tax official told TBS, "Strengthening of monitoring has had a positive impact on the overall income tax collection. Moreover, collection from arrears also jumped, which had an impact."

Besides, early collection of a portion of income taxes that would have been collected in FY24 also contributed to the increase in income tax collection in FY23, said sources.