Revenue collection growth slows in September

The revenue collection growth has slowed down in September compared to the previous two months owing to the downturn of the country's economy.

According to the National Board of Revenue (NBR) data, revenue collection growth, including the collection of income tax, value-added tax and customs duty, increased by 7.67% in September year-on-year while the collection growth in the previous two months increased by nearly 19% year-on-year.

From July to September, however, the revenue collection growth was a little over 15% year-on-year.

Economists and revenue sector insiders say the revenue collection growth slowed down largely due to the decline in imports, which is also reflected in the NBR data.

During the said period, the collection of import duty decreased while the collection of VAT and income tax increased.

Most of the key indicators of the macro economy are currently on a downward trend including the export earnings, which dropped in September and are showing signs of further decline this month. Besides, imports and remittances also decreased in September.

According to the Bangladesh Bank data, the remittance flow in the first 20 days of the current month was some $1 billion. In both July and August, total remittance inflow was $2 billion.

As per NBR calculations, the revenue collection in September was Tk26,834 crore from Tk24,923 crore year-on-year.  

Besides, in the first quarter of the current fiscal year (July-September), the revenue collection was a little over Tk67,000 crore which was Tk58,000 crore in the corresponding period of last fiscal.

A review of revenue figures for September showed that customs duty collection at the import level did not increase but decreased by about 1.5%. However, VAT collection increased by 17% while income tax collection rose by 7%.

A senior official of Chattogram Custom House told The Business Standard on condition of anonymity that the revenue growth slowed as the imports dropped, which continued to be the same in October.

A Benapole Custom House official said although the revenue growth in the Customs House was above 30% in September, it shows a slow growth this month.

"Since the contribution of Chattogram Custom House is very high in the total import duty, growth in other custom houses do not show in the overall picture," said the official.

Towfiqul Islam Khan, senior research fellow of the Centre for Policy Dialogue (CPD) told The Business Standard, "In the first two months of the fiscal year, the main reason for the increase in import tax was the increase in imports due to price increase not due to the efficiency of NBR. As imports dropped in September, the revenue also decreased."

According to the CPD research fellow, revenue collection can be increased by controlling tax evasion and making revenue management online.