The National Board of Revenue (NBR) has worked out five strategies to balance the revenue collection shortfall which stood at Tk 307.91 billion in July-December period of the current fiscal year 2020-21 (FY21).
The 'Budget Management Panel' of the finance ministry took the decision in a meeting held recently with Finance Minister AHM Mustafa Kamal in the chair, said NBR sources.
In this regard, NBR official said the strategies include using electronic fiscal devices (EFDs) in all business entities from shopping malls to restaurants, expansion of income tax net, implementation of the VAT law properly, automation of bonded warehouses and improving overall non-tax revenue collection.
According to the latest data of NBR, the revenue collection faced a shortfall of Tk 307.91 billion as the NBR had been able to mobilize Tk 1104.34 billion against its target of Tk 1412.25 billion in July-December period of FY21.
The total revenue collection for FY21 fiscal was estimated at Tk 3780 billion where the NBR has been asked to contribute Tk 3,300 billion. The revenue from non-NBR sources was estimated at Tk 150 billion while non-tax revenue at Tk 330 billion.
Of Tk 3,300 billion, the NBR has planned to collect Tk 1039.45 billion from income, profit and capital taxes, Tk 1251.62 billion from VAT, Tk 578.15 billion from supplementary tax, Tk 378.07 billion from import duty, Tk 0.55 billion from export duty, Tk 36.86 billion from the excise duty and Tk 15.30 billion from other sources of taxes, according to the budget for FY21.
"As the economy of the country as well as the world was in a standstill due to the Covid-19 pandemic, the revenue collection along with the business activities came to a halt for a long time," a senior official at the NBR said.
NBR Chairman Abu Hena Md Rahmatul Muneem at a recent programme said that three wings -- income tax, VAT and customs -- worked hard during the pandemic.
He expressed his optimism about a better revenue growth in the coming days as the economic activities gaining momentum due to the mass vaccination to control the spread of Covid-19.
As a part of plugging tax evasion, the NBR started installing 100 EFD (Electronic Fiscal Devices) machines by setting up 80 in Dhaka and 20 in Chattogram on August, 2020.
So far, as per the information received from the NBR, the revenue collecting authority has installed 1,500 such machines. It has planned to install 4,000 devices in March and 10,000 by end of this fiscal (FY21).
“We have a plan to install 10,000 EFDs by March and we hope to set up more EFDs in phases in the current fiscal year,” NBR member (VAT Policy) Abdul Mannan Shikder said.
“Steps have already been taken to speed up the installation of EFD in Dhaka and Chattogram to streamline value added tax (VAT) collection online as it will plug dodging of VAT by dishonest businesses,” said NBR official.
"We're hopeful that VAT collection would go up significantly if we're able to bring all business establishments under FED network in phases," Mannan Shikder added.
The NBR sources said currently only 3 percent of total VAT comes from domestic trade at retail and wholesale levels. The use of EFD will increase to 10-15 percent.
The collection growth for the first five months (July-November) was 3.19 percent where the NBR managed to collect Tk 870.93 billion.
As of November, VAT had been the highest contributor to the revenue collection with Tk 334.46 billion.
Besides, the Customs Wing showed its success in terms of percentage exceeding the target and collecting 6.24 per cent higher revenue. The collection from this sector was Tk 277.13 billion.
Till November last year, the Income Tax Wing had collected Tk 259.33 billion but it was Tk 248.83 billion during the corresponding period of the previous fiscal.