The National Board of Revenue (NBR) is reconsidering to introduce interim policy in the current taxation system as the revenue collection in the first four months of the current fiscal declined significantly. Compared to the previous year, until now the first quarter revenue collection is the lowest. Although there has been a steady growth of approximately four percent in revenue collection, but tax revenue shortfall stood at Tk 20,220 Crore against the target.
It is to be noted, against the revenue target of Tk 23,802.64, till September the collection was Tk 17,370.47. This was revealed at a recent meeting at NBR the chairman of NBR presided. During the meeting NBR Chairman informed that Large Taxpayer Units (LTU) (petroleum, gas, tobacco etc) generates 52 to 55 percent of the total local value-added tax revenue for the board. But due to the exemption on supplementary duty in the gas sector, there was a revenue deficit of Tk 1528.75 crore in contrast to the last fiscal year.
Besides he also stated that the price of low tier cigarettes has been increased from TK. 35 to Tk. 37 and the price of the middle tier cigarettes increased from Tk.48 to Tk. 63. As a result, the rise in the price of middle-tier (31.25%) is greater than the lower-tier (5.71 percent)-which caused consumers of middle-tier cigarettes to switch over to the low-tier.
It is to be noted, the cigarette sector contributes more than 10 percent of national revenue earning. Dependency on this sector for revenue collection is notable. Approximately 28,000 crore taka revenue was collected from tobacco sector in fiscal year 2018-2019. Showing the significant decline in revenue collection, the meeting also revealed that the approximate collection in the first three months of the fiscal year 2019-20 is Tk 5,900 crore. The total collection for the first 4 months of the fiscal year is 8,200 crore Taka (approx.). If revenue is being collected at this same pace, then in the remaining 8 months of the fiscal year approximately 24,000 crore Taka will be collected. This will be a serious drop from the expected revenue collection.
The VAT wing said it received Tk 1,000 crore (approx.) less than expected revenue in the first quarter from the cigarette sector alone. On the other hand, due to eBIN complexity, revenue collection has also dropped. Implementation of the new VAT law has created many complications. Under the new law, VAT cannot be granted without eBIN. But many eBIN candidates cannot get registered through the website.
