NBR eyes big sectors for revenue collection in the time of pandemic

The National Board of Revenue (NBR) for revenue collection is focusing on big sectors such as tobacco, pharmaceuticals, cellular phone, banks, mobile financial service providers (bKash) and the internet which have been running operations at this time of shutdown.

The turnover in the sectors seems to have increased when all other sectors, except for essential products, remain inactive, according to a letter, signed by NBR Member (VAT implementation and IT) Jamal Hossain, sent to all 12 field-level VAT commissioners on Sunday.

Jamal Hossain said, "Our revised target for the current financial year is Tk108,600 crore. As of April, we have collected Tk67,759 crore. In the last two months, we will have to raise around Tk40,000 crore to achieve the target."

"Even if we want to make it equal to the last financial year, we still have to collect around Tk20,000 crore. But we do not have the opportunity to look at all the sectors for VAT collection. Because the coronavirus pandemic severely affected some sectors."

"So we can focus tobacco, pharmaceuticals, cellular phone, banks, bKash and the internet for revenue collection," Jamal Hossain added. 

"It is important to get a view in advance about how much revenue may come from the sectors," he said.

Officials said the revenue board would face a huge shortfall in tax collection in the current fiscal year 2019-2020 as it had already witnessed a shortfall of around Tk56,000 crore in nine months (July-March) of the fiscal year.

The situation will get worse in the coming months due to the impact of coronavirus pandemic as economic activities have come almost to a halt due to the general holidays, they said.

The Centre for Policy Dialogue predicted that revenue collection might fall Tk1 lakh crore short of the target (Tk3,25,600 crore) in this fiscal year.

Among the sectors, the tobacco industry is the single largest source of VAT and supplementary duty in the country.

In the last fiscal year (2018-2019), the NBR received around Tk30,000 crore from the sector mainly from the cigarette.

On the other hand, the applicable VAT rate is 15 percent on the production of pharmaceutical products while there is another 2.4 per cent VAT on sales of the products.