Will NBR’s revenue collection in June hit Tk 856bn to meet FY24 target?

ঢাকার আগারগাঁওয়ে উদ্বোধনের অপেক্ষায় দৃষ্টিনন্দন জাতীয় রাজস্ব বোর্ড ভবন। ছবি: আসিফ মাহমুদ অভি

The National Board of Revenue, or NBR, will have to collect Tk 856.22 billion in June to meet the revised target set for FY 2023-24.

In the budget for the outgoing fiscal year, former finance minister AHM Mustafa Kamal had initially set a revenue target of Tk 4.3 trillion for the NBR. This was later revised downward by Tk 200 billion to Tk 4.1 trillion.

In the first 11 months of the fiscal year, from July to May, the NBR collected Tk 3.24 trillion, averaging Tk 290 billion per month.

So, in the last month of the financial year, the NBR needs nearly three times higher than the 11-month average to achieve the target.

In the 11 months, the NBR’s collection has not been far from the target.

The revenue target from income tax, VAT, and customs was Tk 3.26 trillion. And, the NBR was only Tk 13.62 billion shy of it, achieving 99.58 percent of the target.

For the concluding month, the NBR has already set a target of Tk 842.6 billion, requiring a collection increase of about 1.5 percent from the previous months.

When asked whether it would be possible to meet the target in the last month, former NBR chairman Muhammad Abdul Mazid told bdnews24.com: "It’s not unusual to collect more than usual in the final month."

"The NBR's longstanding practice often involves early revenue collection from companies to achieve its targets, typically coordinated between July and August," he added.

Comparing the final month's such a high revenue target with the 11-month period, he said: "This is a revised revenue target. The NBR has set targets in this way, which they will be able to achieve.”

“We'll need to assess how much of the earlier budgeted target has been met. This will show a huge deficit by the fiscal year's end," Mazid said.

REVENUE GROWTH ON TRACK

Analysing the NBR's previous revenue collection trends, it is evident that tax administration typically meets around 90 percent of its targets.

However, this year, revenue collection has notably increased, leading officials to anticipate that the NBR will come very close to meeting the goal.

Member of NBR’s VAT implementation and IT, Moinul Khan, told bdnews24.com: "Compared with last year, we have collected more revenue. We have increased our capabilities and reduced the gaps. We have collected all the longstanding dues by improving intra-departmental communication over the years.”

"We think we'll get very close to meeting this year's revenue target. We're hopeful we'll achieve the VAT target, especially with the IMF's relaxed conditions," he added.

Although the government revised the revenue target to Tk 4.1 trillion, the International Monetary Fund conditions under a $$.7 billion loan programme require collecting Tk 4.005 trillion this fiscal year.

Bangladesh has agreed to increase the tax-GDP ratio by 0.5 percentage points this fiscal year to secure the loan.