Daffodil International University
Bangladesh => Business => Income Tax => Topic started by: ariful892 on September 18, 2014, 05:47:54 PM
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15-02-2014: The Financial Express: The government has cut the revenue mobilisation target for the National Board of Revenue (NBR) by Tk 110 billion following a big shortfall in its collection until December last of the current fiscal year (FY). The government cut the revenue target to Tk 1.25 trillion from Tk 1.36 trillion following the downward revision of the targeted GDP (gross domestic product) growth rate for the FY 2013-14 to 6.3 per cent from 7.2 per cent.
A senior NBR official said the revised revenue target had been finalised in a meeting at the ministry of finance (MoF). "Although the NBR proposed revising the target downward to Tk 1.20 trillion, the MoF did not agree in view of the demand for internal tax revenue to meet the expenditure in the current fiscal," he said.
Until December last the NBR saw a shortfall of Tk 85.09 billion against its target as major economic indicators were performing well below the expectation. Internal revenue collection showed a poor growth in the first seven months of the current FY due to a political impasse in the second quarter of the fiscal.
Tax officials feared the businesses might see a prolonged impact of the political turmoil in the third and fourth quarters of the current FY. "The initial target of Tk 1.36 trillion was quite ambitious in the election year. Collection of Value Added Tax (VAT) saw the highest shortfall in the past few months," he said.
The tax officials are still in doubt about achieving the revised target of Tk 1.25 trillion as they found it challenging to make up for the shortfall in revenue collection in the first half.
Most players in the service sector including banks, mobile phone companies, gas companies, hotels, etc. bore the brunt of the political turmoil. VAT collection from the mobile phone sector posted a negative growth of 24 per cent in the July-December period compared to that of the corresponding period of the last fiscal.
Net profit of the major corporate taxpayer Grameenphone dropped by 16 per cent in the calendar year (CY) 2013. Operating profit of the country's major commercial banks also dropped in 2013. The import revenue fell short of the target with appreciation of the Bangladesh Taka (BT) by more than 2.50 per cent against the US dollar in 2013 due to a higher growth in exports.
Implementation of the government's Annual Development Programme (ADP) is one of the major sources of tax revenue, but the ADP implementation showed a poor trend in the July-December period. About 27 per cent of the ADP could be implemented in the first half (H1) of the current FY.
The revenue collection posted 9.0 per cent growth in the H1, compared to that of the corresponding period of the last fiscal, against the target of 24 per cent. The NBR collected Tk 489.83 billion in the H1 against the target of Tk 575.18 billion.
The all three NBR wings -- income tax, customs and VAT -- posted shortfalls against their respective targets. Officials said the NBR was yet to finalise the revised targets for its wings. In the budget for the current FY, the target of income tax collection had been set at Tk 483 billion, VAT Tk 510 billion and customs Tk 357.90 billion.