NBR officials said a higher target set for the NBR beyond its capacity and lack of business activities at an expected level are the main reasons behind the deficit
The National Board of Revenue (NBR) fell a record 20 percent short of the revised revenue collection target for fiscal year 2018-19.
According to NBR sources, in the just concluded financial year Tk 2,23,591 crore revenue was collected in total against a revised target of Tk 2,80,000 crore, falling short of around Tk57,000 as per the provisional calculations by the NBR.
NBR officials said a higher target set for the NBR beyond its capacity and lack of business activities at an expected level are the main reasons behind the deficit.
Besides, the revenue collection was low as NBR's enforcement activities were hampered during the December 30 elections, they added.
NBR Chairman Md Mosharraf Hossain Bhuiyan told The Business Standard that the target this fiscal was 42 percent higher than the real collection in FY18.But given the condition of the country's economy, it is not achievable.
Besides, added the NBR chief, "To keep businessmen out of harassment centring the [national] election, enforcement activities at the field level werekept limited. For the same reason, import of the commodities like cars, which brings big tariff, was relatively low."
Dr AB Mirza Azizul Islam, former advisor to the caretaker government, said, "Considering the capacity of our economy, setting more than 40 to 42 percent revenue collection target is unrealistic and is thus not achievable."
Tax collection target may be set at the highest 20 to 22 percent, he said.
An analysis of NBR data shows that deficit in NBR's revenue collection last fiscal was higher than any time in the past.
FY18 saw the previous highest deficit, falling short of 8.26 percent of the target. In FY17, the deficit was 7.21 percent.
On the other hand, in FY15 and FY16, the NBR collected more revenue than the revised target. The finance ministry said the revenue collection was satisfactory in the previous fiscal years too.
Additional Secretary (Budget) to the Ministry of Finance Md Habibur Rahman said, "In revenue collection, the last two fiscal years saw more deficit. I think it happened due to a higher target set against a lower capacity of the NBR."
A review of the statistics shows, from July 2018 to June 2019, the highest deficit was in realisation of income tax at source.
Against a target of Tk96,632, the collection in personal income tax, corporate tax and travel tax was around 30 percent short.
The revenue deficit from income tax last fiscal was about 29 percent of the revised target. Four years back, the NBR was able to achieve 98 percent of the revised target.
Import-export duty is at second position in the revenue deficit as the NBR is more than 18 percent short in collection in this regard.
Meanwhile, the NBR performed better in collection of value-added tax (VAT).
It collected Tk 89,571 crore from this sector, an accomplishment of 86.12 percent of the target, even though experts consider VAT as a hindrance to good governance in society.