Photo: Messenger
The National Board of Revenue (NBR) will have to collect much more revenue than the current fiscal year to meet the revenue collection target that the government is going to fix in the next fiscal year's budget.
This is 17 per cent higher than the revised target for the current fiscal year. However, the collection so far may be 30 per cent more than that. In such a situation, economists fear it is not possible to achieve the target.
According to sources in the Ministry of Finance, the budget for the fiscal year 2024-25 is being prepared with a revenue target of around Tk 5.4 lakh crore. The majority of it, i.e. the target of collecting Tk 4.8 lakh crore, can be fixed to NBR, the main revenue collection agency of the country.
In this case, the total revenue collection target is about Tk 50,000 crore more than the announced budget for the current fiscal year 2023-24, but about Tk 70,000 crore more than the revised target. However, collection so far is 8 per cent less than the revised target. If collection does not increase in the end, revenues of Tk 1 lakh crore more will have to be collected in the next fiscal year.
The government's revenue collection target for the current financial year was Tk 5 lakh crore. Out of this, the target of collection through NBR was Tk 4.30 lakh crore. The target of non-tax and other income is Tk 20,000 crore. Tk 50,000 crore is considered income outside tax.
The government has since scaled back the huge revenue target amid a slowdown in business investment and the economy due to high inflation and contractionary policies. The revised target for NBR has been increased to Tk 4.10 lakh crore.
According to this calculation, a little more than 92 per cent of the revenue that was supposed to be collected in nine months of the fiscal year has been collected. That is, the collection from the target has been less than 8 per cent. Till March of the current financial year, Tk 2 lakh 59 thousand 958 crore has been collected, which is 15.27 per cent more than the same period of the previous financial year. However, the collection in the last three months increases slightly every year.
A senior finance ministry official told The Daily Messenger, “We are moving ahead with a target of Tk 5.40 lakh crore revenue collection from internal resources. The budget that will be presented in parliament on June 6 may be a little more or less.”
He further said, “The target is Tk 4.80 lakh crore from NBR-controlled tax, Tk 15,000 crore from non-NBR tax, and Tk 45,000 crore from other non-tax sectors.” According to this calculation, NBR will have to increase collection by Tk 70,000 crore or 17 per cent more than the revised target.
Recently, NBR Chairman Abu Hena Md Rahmatul Muneem said in a discussion, “Each year, efforts are made to increase the revenue target. There are new strategies to achieve that goal. We have to wait till the budget announcement to see what strategy is taken this time. That strategy will be mentioned in the budget.”
In this regard, Ahsan H Mansur, executive director of Policy Research Institute (PRI), told The Daily Messenger, “The target of revenue collection in the next financial year will be difficult to meet. I would say it is very much caught up in the light of reality and past experience.”
“However, this cannot be termed unattainable if the right policy strategy is adopted and necessary reforms are brought in. But we have seen in the past that high revenue collection targets have never been realised,” he added.
Every year, NBR collects revenue at a higher rate than the previous year, but the growth rate is decreasing in comparison. In the fiscal year 2020-21, there was a 22 per cent growth in revenue collection, but in the fiscal year 2022-23, it came down to around 10 per cent.
Before the Covid-19 pandemic, NBR had collected a revenue of Tk 2 lakh 18 thousand 616 crore in the financial year 2018-19. In 2019-20 financial year, due to Covid-19, it decreased slightly to Tk 2 lakh 16 thousand 37 crore.
The target of revenue collection in the financial year 2020-21 was Tk 3.78 lakh crore. In the next financial year, it stood at Tk 3.89 lakh crore. The revenue target for the fiscal year 2022-23 was fixed at Tk 4.33 lakh crore.
In the financial year 2020-21, NBR collected Tk 2 lakh 63 thousand 886 crore. That year, growth was 22.14 per cent. In the next financial year, the collection of NBR increased to Tk 2 lakh 92 thousand 881 crore. However, growth fell by 11 per cent. In the fiscal year 2022-2023, a revenue of Tk 3 lakh 31 thousand 454 crore was collected and growth further declined by 9.89 per cent.
Messenger/Disha
