Jul-Nov revenue grows 14.26%, still short of target

The National Board of Revenue (NBR) achieved a 14.26% year-on-year increase in revenue collection for July-November of FY24. Despite this growth, the total amount collected fell short of the targeted goal.

NBR officials reported higher domestic consumption in November despite sluggish imports. Increased local spending, along with the Income Tax Return Filing Month drive, boosted VAT collection from domestic transactions and income tax revenue.

According to NBR data, Tk1.32 lakh crore was collected in the first five months of this fiscal year, with a deficit of Tk16,000 crore compared to the Tk1.48 lakh crore target. In the same period of FY23, Tk115,818 crore in revenue was collected with a 13.25% growth.

However, missing the target raised concerns about meeting International Monetary Fund (IMF) conditions.

An official, speaking anonymously, cited challenging economic conditions and a wide gap between targets and reality as reasons for the deficit. He anticipates the deficit to continue by year-end, potentially complicating compliance with IMF targets.

As a part of the conditions for its $4.7 billion loan to Bangladesh, the IMF stipulated a revenue target of nearly Tk4 lakh crore by the end of FY24. In the first five months of the fiscal year, 31% of this target has been achieved.

The NBR itself set a revenue target of Tk4.30 lakh crore for FY24, exceeding IMF's target.

Former NBR member Farid Uddin said current economic activity falls short of normalcy, impacting revenue generation and hindering target achievement. 

He, however, mentioned that revenue collection towards the end of the fiscal year usually accelerates, which suggests the potential for closing the deficit significantly.

NBR sees mixed growth

NBR's Jul-Nov revenue shows mixed growth. Customs (imports and exports) saw a growth of 8.84%, local VAT (on goods and services) collection surged 16.50%, while income tax saw the highest jump at 17.45%.

According to NBR data, during July-November of FY24, income tax collection was Tk39,384 crore against the target of Tk45,496 crore and VAT collection amounted to Tk51,510 crore against the target of Tk56,075 crore.

Revenue from customs lags as compared to income tax and VAT with Tk41,439 crore collected against the target of Tk47,222 crore.

NBR officials said customs revenue fell as imports dipped due to LC issues and duties suffered. 

In a press conference last week, NBR Chairman Abu Hena Rahmatul Muneem expressed concern that the current economic slowdown, coupled with the upcoming election, could potentially generate political instability that might jeopardise revenue target achievement.