The government’s revenue earning in the current fiscal year is likely to fall short by about Tk 50 billion (Tk.5,000 crore) against the target fixed for the National Board of Revenue (NBR) if the current sluggish pace of revenue collection continues. The revenue shortfall during the first five months of the current fiscal year was Tk 23.74 billion with the actual earnings being Tk 117.87 billion during the period against the target of Tk 141.61 billion, according to the latest statistics of the NBR.

The government would be increasingly dependent on bank borrowing or forced to cut both revenue and development expenditures to tackle the situation, cautioned experts. Widespread corruption along with traditional approach in revenue collection are two major reasons for the gloomy scenario, it is learnt.

Besides, the dismal revenue performance has also been attributed to the decision on duty cut, dictated by the World Bank, in the current budget coupled with litigation and taxes long outstanding with the state-owned enterprises, sources said. The government had fixed the revenue target for NBR at Tk 410.55 billion for the 2006-2007 fiscal year, up by about 21 per cent from the earnings in the previous fiscal year.

Sources said the target could certainly be achieved if corruption was eliminated from the revenue department and taxpayers and importers did not evade taxes. Both taxpayers and revenue employees gain from corruption, while honest taxpayers and good industrialists are victims of the situation, sources said. According to figures, revenue earnings from import duty was Tk 31.77 billion during July-November period of the current fiscal year, up by Tk 1.49 billion or 4.92 per cent from the earnings in the corresponding period of the previous fiscal year.

The earning from value added tax [import] was Tk 23.34 billion during the period, up by Tk 1.33 billion or 6.03 per cent from the corresponding period of the previous fiscal year. However, earnings from local VAT source achieved the target of Tk 21.68 billion, up by Tk 5.02 billion or 23.14 per cent, while income tax collection was Tk 18.38 billion, up by Tk 3.82 billion or 20.82 per cent.

Income from supplementary duty [local] was Tk 17.76 billion, up by Tk 677.9 million or 3.82 per cent and income from travel tax was Tk 895.9 million, up by Tk 189 million or 21.10 per cent during the period compared to the corresponding period of the previous fiscal year, according to the NBR data.

The International Monetary Fund in a recent report cautioned that the overall revenue shortfall could cross Tk 40 billion if the earning situation was not improved, sources in the finance ministry said. However, high officials in the NBR hoped the situation would improve when the political situation began to stabilise.