The government revenue collection agency National Board of Revenue (NBR) has projected that revenue collection for next fiscal budget shall set Tk 2,50,000 crore instead of 3,30,000 crore as earlier set.
The NBR last week in a letter to Senior Finance Secretary said “it will be “difficult” for the board to achieve that big target of Tk 3,30,000 crore in the next fiscal year as was set earlier even if the pandemic is over soon,”
In the last five fiscal years, revenue collection had been maintaining around 14 percent growth on an average; as per that calculation, the next fiscal year’s revenue target can be set at Tk 2,50,000 crore, according to a letter r sent by NBR Chairman and Senior Secretary of Internal Resources Division Abu Hena Md Rahmatul Muneem to Finance Division Senior Secretary Abdul Rouf Thalukder. The Business Mirror has obtained a copy of the latter.
Due to coronavirus pandemic, people’s overall consumption has dropped, resulting in the decline in revenue earnings both on national and global scale, said the letter.
In terms of domestic consumption, the demand has fallen leading to the fall in import. And there will be a negative impact on earnings from the indirect tax because of the low import of raw materials and machinery, read the letter.
NBR chairman also said if the revenue outlay is set big, it will create a mental pressure on the NBR officials and staff; as a result, they might feel discouraged to collect revenues.
Moreover, production, marketing, supply, and services closely related to people’s basic needs are either tax-free or under minimum tax regime. It is expected that in near future, the country’s maximum economic activities will centre on those basic needs. As a result, revenue collection will see a decline even if the situation returns to normalcy after Covid-19 pandemic, read the letter.
In the 2018-19 fiscal year, for the first time the revenue collection faced a shortfall of around Tk 15,000 crore. Due to the coronavirus pandemic, NBR won’t be able to achieve current fiscal (2019-20) year’s revenue target of Tk 3,00,500 crore, said the letter.
Meanwhile, the government has set a Tk3,30,000 crore revenue collection target for the NBR for the upcoming 2020-21 fiscal. The target of the next fiscal is 1.35% higher than that of the original goal of Tk 3,25,000 crore and almost 10% higher than the revised target set at Tk 3,00,500 crore for the current fiscal year.
Of the Tk3,30,000 crore revenue target next fiscal, the target for value-added tax (VAT) collection has been set at Tk 1,28,000 crore, followed by income tax at Tk 105,000 crore and customs duty at Tk 95,652 crore. For the first time, the target for income tax collection has been lowered by around Tk 1,000 crore for the upcoming fiscal, compared with Tk 1,06,000 crore in the current fiscal.
The forthcoming budget may be rolled out on June 11. In a meeting with Prime Minister Sheikh Hasina on May 5, Finance Minister AHM Mustafa Kamal finalised the size of the budget for FY 2020-21.