Until January this year, the collection has been Tk53,081 crore — only 41.55% of the target for FY21
With just over 41% VAT collection target met in the first seven months of this fiscal year, the National Board of Revenue (NBR) is mounting pressure on its field offices to shore up revenues.
It has asked the offices to attain the target keeping the present situation in mind and emphasize establishing intensive communication with the big companies.
In the 2020-21 fiscal year budget, the total revenue collection from VAT wing was fixed at Tk127,747 crore. But until January this year, the collection has been Tk53,081 crore — only 41.55%.
No smooth sailing
The VAT collection target from the import level was Tk45,554 crore. But until January this year, the NBR has been able to collect Tk19,659 crore. In January, the collection was Tk2,952 crore.
In the first seven months of the last fiscal year, the collection was Tk17,814 crore while the collection in the month of January 2020 was Tk2,676 crore.
It means the growth on a month-to-month basis is 10.32% while it is 10.35% considering the collection of the first seven months of the two fiscals.
On the other hand, the target for VAT collection from the local level was Tk82,192 crore. But until January this year, the NBR collected Tk33,422 crore, where in the month of January the amount was Tk5,566 crore.
The collection till January 2020 was Tk34,147 crore while the collection in January last year stood at Tk5,071 crore.
It shows that the growth on a month-to-month basis is 9.76% while it experienced negative growth of 2.12% considering the collection of the first seven months of the two fiscal years.
Covid-19 hits revenue collection
A senior official of the NBR said that the situation during the pandemic is not very conducive for revenue collection with sizeable growth.
“We are all aware of the situation, this might prevail or improve. Whatever it is, we have to step forward with necessary actions to attain the target,” he said.
He mentioned that good communication with large companies that usually give a significant amount of VAT would be a better tool for enhanced revenue collections.
He said that officials would have to depend on items like cigarettes, mobile, bank, bKash, internet and medicine, which pay higher revenue to the national exchequer.
The NBR also asked its officials to take necessary precautionary and safety measures for protecting themselves from coronavirus while discharging their duties. The respective commissioners will monitor the matters in the field level offices.
Besides, the NBR official said that special attention needs to be given on collecting advance VAT and outstanding revenues from various business entities.
According to an official document, at the end of the 7th Five Year Plan, which ended on June 2020, the revenue GDP ratio was to be 16.1% in 2019-20 fiscal after gradual improvement, but the achievement was estimated at 12.7% while it was 9.9% and 9.6% in 2018-19 and 2017-18 fiscals respectively.
The total revenue collection target for the 2020-21 fiscal is Tk378,000 crore where the NBR will contribute Tk330,000 crore. The revenue from non-NBR sources was estimated at Tk15,000 crore, while non-tax revenue at Tk33,000 crore.
Of the grand amount for the NBR, Tk103,945 crore will come from income, profit and capital tax, while Tk127,747 crore will be contributed by VAT, supplementary tax will provide Tk57,815 crore, Tk37,807 crore will come from import duty, Tk55 crore from export duty, Tk3,686 crore from the excise duty and Tk1,530 crore as other taxes.