Published in The Daily Star on Monday, 18 May 2015.
Tax receipts improve in March
Tax collection improved in March with economic activities regaining pace as the violent political situation gradually subsided.
Revenue receipts rose 18.30 percent to Tk 12,750 crore in March from Tk 10,778 crore a year ago, according to data from the National Board of Revenue.
Collection had slowed in February as businesses suffered in the wake of violent blockades and repeated strikes, enforced by the BNP-led alliance since January 6.
Revenue collection growth slipped to 14.28 percent in February from 17.75 percent in January.
In December 2014, collection had soared to 29 percent year-on-year, according to NBR.
“The month of March was relatively better in terms of revenue collection as economic activities started picking up. Increased monitoring helped us log higher revenue,” said an official of NBR, seeking anonymity.
In March, collection from all three sources – import, VAT and supplementary duties from local businesses and industries, and income tax — rose at higher rates than in the previous month.
Overall, tax receipts rose 16.67 percent to stand at Tk 92,729 crore in July-March of fiscal 2014-15 from Tk 79,477 crore in the same period a year ago.
Growth in collection of income tax and duty at the import stage accelerated during this period, while VAT and SD receipts from domestic businesses slowed, data showed.
Towfiqul Islam Khan, research fellow of Centre for Policy Dialogue, said an easing political situation helped revenue collection to perform better in March.
“The effect of strikes and the political impasse started to dry down in March, enabling business and economic activities to recover.”
In addition, advance income tax collection usually improves during the last month of the third quarter of a year, said Towfiq.
However, the effect of the long spell of blockades on the economy prompted policymakers to slash the budget as well as the revenue collection target for fiscal 2014-15.
The government had earlier reduced NBR’s revenue collection target to Tk 135,028 crore from Tk 149,720 crore, set at the beginning of the year.
The collection target for VAT and SD from domestic sources, as well as income tax saw a cut but the revenue target from the import stage was raised, according to the NBR official.
“Such a revision for NBR revenue mobilisation targets was inevitable. In fact, these targets were set at too ambitious levels initially,” said Towfiq.
He said NBR’s total collection would be close to the revised target by the end of the fiscal year on June 30.