Three reasons blamed
Golam Mostafa Jibon: A catastrophe is being noticed in the VAT collection that may put the government far away from a lot amount of revenue earning this time.
Three reasons behind the current disruption of overall VAT collection have been identified by the authorities concerned. The reasons are lockdown amid corona pandemic, VAT exemption and VAT evasion.
Although, VAT office was open in lockdown, it was not possible to collect VAT at the desired rate. Due to this, the collection of VAT was very slow even though there was some momentum in revenue collection at the end of the current financial year.
As the average growth of revenue collection was 15.70 percent during the review period, the growth of VAT collection was 11.13 percent.
The target for VAT collection in the first 11 months of the current financial year was Tk 97,900 crore. Of them, around Tk 84,003 crore was collected.
In other words, the revenue deficit in VAT alone is Tk 13,896 crore. Chattogram VAT Commissionerate is lagging behind among the VAT Commissionerates of the country at the time of discussion, relevant sources said.
Analysis of the data of the National Board of Revenue (NBR) has shown that Chattogram VAT Commissionerate is lagging far behind in the collection of VAT among the commissionerates of the country.
In May, the revenue collection of Chattogram VAT Commissionerate was increased by minus 4.39 percent compared to the same period of the last financial year. The situation was similar in Jessore VAT Commissionerate. During the review period, the growth of Jessore VAT Commissionerate was minus 1.35 percent. Minus growth in achieving the target was noticed at Dhaka West VAT Commissionerate. In the first 11 months of the current financial year, the growth was minus 1.13 percent compared to the same period of the previous fiscal year. Cumilla VAT Commissionerate, which has repeatedly campaigned for the top VAT collection, was lagging behind among the 12 VAT Commissionerates.
During the period under review, the VAT collection of Cumilla VAT Commissionerate has increased by only 1.81 percent. But the average growth of VAT collection was 11.13 percent. Achievement of Cumilla VAT Commissionerate was 17.31 percent behind the target set during the period under review. However, among the commissionerates, the Large Taxpayer Unit (LTU) has done well at the end of the first 11 months of the current financial year. During the period under review, the growth of LTU VAT collection was 16.89 percent.
Economists said, complications in VAT still exist. Prior to Corona pandemic, the desired target was not achieved even during the period when human purchasing power was increasing.
In particular, VAT evasion, VAT exemption and proper online activities have adversely affected the collection of VAT. Besides, VAT collection has also been affected due to lockdown. Due to these reasons, the revenue deficit is also increasing. VAT has lost momentum even after launching lottery to speed up VAT collection. Many people have become unemployed due to continuous lockdown caused by pandemic. Meanwhile, people’s purchasing capacity has decreased compared to the normal time. It has affected VAT collection. But, NBR officials claimed that the revenue collection tends to be a bit higher at the end of the financial year. However, NBR officials at the field level also said that it was impossible to achieve this huge target during the corona epidemic.
Former Chief Economist of the World Bank Zahid Hossain said, “The collection of VAT has decreased centering the corona pandemic. This information is not completely correct. This is because the NBR has been deprived of huge amount of VAT due to VAT exemption. Another issue is VAT evasion. Even though ordinary consumers pay VAT, this amount is not being deposited in the government treasury properly.”
The economist thinks that the collection of VAT has also decreased due to the closure of hotels, restaurants and shops during lockdown.
According to NBR sources, the deficit stood at Tk 44,361 crore in the first 11 months of the current financial year. Earlier, the finance ministry had set a target of Tk 29,000 crore. After cutting the huge target for the current financial year, the NBR’s revenue collection target was set at Tk 301000 crore. In the first 11 months of the current financial year, the NBR’s revenue collection target was Tk 2,62,117 crore. The revenue collected during the mentioned period was Tk 2,17,758 crore. The revenue deficit of NBR in 11 months was Tk 44,361 crore.
Stakeholders seem that it is not possible to achieve this huge target at this time.
Mannan Sikder, Member in Charge of NBR VAT implementation said, “The pace of VAT collection was a bit slow due to corona. VAT offices were also open across the country during lockdown, the VAT collection came to reduce due to the closure of hotels, restaurants and other establishments at that time. However, VAT collection has increased now again.
Senior NBR officials said, they have already set up 3,500 Electronic Physical Devices (EFDs) in various markets and shopping malls. The process of installing 10,000 EFDs is underway by the last of June. The official thinks that the VAT collection may be increased a little bit.
Sources further said that in the first 11 months of the current financial year, the NBR’s income tax and travel tax target was Tk 77,294 crore or 13.55 percent. The revenue collected during the period under review was Tk 65,626 crore. The revenue deficit in income tax in 11 months was Tk 11,668 crore.
The target for imports and exports in 11 months was Tk 86,923 crore, while the revenue collected during the period under review was Tk 68,126 crore.
In other words, the revenue deficit in import and export in 11 months was Tk 18,796 crore. In terms of money, it was the most in import and export. However, the growth was 24.28 percent compared to the same period of last year.
Zarif Mahmud: The foreign exchange reserve at the moment is at a danger level of about $15…