First News
Volume:7, Number:33
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Business & Finance 2
THIS WEEK

Tailing the Target

| Monowar Hossain |

Given the task of collecting more than BDT2 trillion during the current fiscal year, the NBR sources claim that its collection shortfall is around BDT70 billion

The principal revenue collection machine of the government, National Board of Revenue (NBR), is passing through a tough time achieving its huge collection target by June, and it is not confident about its goal.

Apparently the top echelon of the organization is maintaining an outward posture of confidence about meeting the goal. But, the mid-tier officials of the organization are straining to increase revenue earnings by opening new avenues before the end of the current fiscal year (2016-17). They are of the opinion that the uphill task of achieving the collection target with many inherent weaknesses of the organization, mainly lack of adequate manpower, is not logically possible. Yet, even if the collection target is achieved, it will be a miracle in the history of revenue collection in the country. Perhaps, the top echelon of NBR has started realizing the situation in the middle of the year. So, their response is: "We are keeping our efforts on to get to the target" In the over BDT3.40-trillion budget announced for the current fiscal year (2016-17), the NBR was entrusted with collecting this revenue figure, with 35.8 percent collection was fixed on VAT (value added tax) head and 35.4 percent on Income Tax head. Before finalizing the amount to be collected, the NBR personnel at various internal meetings had expressed serious doubts about achieving the collection target set for them, given the structural weaknesses of the organization that included lack of proper manpower. However, ultimately, it had to comply with the highly ambitious target.

In its attempt to reach the target, the NBR held “Tax Fair” in the capital and across the country. It also held several discussions with the sellers (shop owners) to encourage them to pay VAT properly. These initiatives yielded some results, but it is still far from reaching its goal. Upon expiry of the first half of the year, it has been revealed that the collection made during the first half is lagging quite far behind the target set for that period. NBR sources said the collection shortfall during the period is around BDT70 billion. With uncertainty in mind, the NBR launched its collection drive along with initiating various programs to make the drive a success. It focused on Income Tax and VAT heads. At the end of the first quarter of the year, the outcome made them hopeful about the success of their drive, as the number of income tax returns and tax deposits registered a noteworthy increase. But by the end of the second quarter in December, the collection picture was not so encouraging as it was at the end of the first quarter.

However, compared to the collection made during the same period in the previous year, the increase in collection in the current year was substantial. This may be a solace to the revenue collection agency of the government. The government has the option to revise the collection (and also national budget). Almost every year it exercises that option around the middle or third quarter of the collection year. So, naturally, it is presumed that the government might go for revisiting the collection target when it would find the real collection has fallen far behind the target set by itself

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