Friday, August 23, 2019

Bangladesh revenue growth slows to five-year low of 10.7pc

  • Senior Correspondent, bdnews24.com
    Published: 2019-08-01 02:27:10 BdST

The National Board of Revenue collected about Tk 2.24 trillion in 2018-19 fiscal year with a 10.7 percent growth but missing the target by 20 percent and posting the slowest rate in five years.  

NBR Chairman Md Mosharraf Hossain Bhuiyan has blamed the waivers in taxes, a drop in import, and a tendency to evade paying taxes for the slow growth of revenue.

Waivers cost the government Tk 167 billion in lost revenue last financial year, he told the media while releasing the data at the board’s offices in Dhaka on Wednesday.

Revenue growth was almost double in 2017-18 than that of last year. It grew 17.9 percent to Tk 2.02 trillion that year. 

Bangladesh posted revenue growth as low as 10.7 percent for the last time in 2013-14.

The largest source of last financial year’s revenue was Value Added Tax or VAT –accounting for more than Tk 876 billion or 39.1 percent of the total collection. It was followed by income tax of about Tk 729 billion or 32.6 percent and duty of over Tk 633.82 billion or 28 percent.

“Import slumped slightly in last fiscal year. I think a drop in food products caused the slump in import as well as duty,” Mosharraf said. 

Bangladesh’s total import grew by only 2.61 percent to a little over $56 billion in 11 months of the last fiscal year. The previous year saw a growth of 25.23 percent to over $58.86 billion, according to the central bank.

Speaking about the tendency to dodge taxes, Mosharraf cited nstances where many traders were importing galvanised plain steel sheets, for which the duty is 25 percent, by declaring import of steel roll with 10 percent duty.

The government was also counting lost revenue as many traders were importing goods under duty-free bonded warehouse facilities but selling those in open market, he said.

The board was taking action against such businesses and have suspended 342 licences, according to the NBR chairman.

The government has made a Tk 5.23 trillion budget this fiscal year with a plan to feed 72 percent of the spending from revenue, setting a target of about Tk 3.78 trillion, which is 19 percent more than the one mentioned in the revised budget for last fiscal year.

NBR chief Mosharraf said the government was sanguine about achieving the target with the imposition of 5 percent advance tax on import and by bringing 672,000 taxpayers under the tax net.