Slow implementation of the annual development programme has taken a heavy toll on income tax collection by National Board of Revenue in the first half (July-December) of the current fiscal year (2018-19).
Most of the field-level income tax offices lagged behind the targets set for the offices for the July-December period due to a lower-than-expected income tax collection at source, NBR officials said.
A large portion of source tax comes from ADP implementation fund, they said.
They said that slow disbursement of allocation under the ADP put a negative impact on income tax collection from the sector in July-December, causing a shortfall of Tk 6,976 crore in the overall income tax collection.
In the circumstances, field-level tax offices are forming committees to monitor tax deduction at source, they added.
The share of tax deduction at source (TDS), also known as withholding tax, is around 60 per cent in the total income tax collection of NBR.
The lion’s share of TDS comes from the government’s development budget implementation, interest and dividend.
According to NBR data, tax officials managed to collect Tk 28,456 crore in income tax in July-December of FY19 against the target of Tk 35,432 crore set for the period.
Income tax collection, however, grew by 11 per cent in the period compared with that in the same period of the previous fiscal year, the data showed.
According to Implementation Monitoring and Evaluation Division of the planning ministry, in July-December the government’s 57 agencies could spend only Tk 49,645 crore or 27.45 per cent of the total ADP allocation of Tk 1,80,869 crore for the current fiscal year.
Income tax commissioners at a progress review meeting on income tax collection held on January 10 at the NBR headquarters raised the issue of slow implementation of ADP and attributed it to the failure in achieving the collection target.
NBR chairman Md Mosharraf Hossain Bhuiyan presided over the meeting.
NBR member (income tax administration and human resource management) Kalipada Halder also attributed the low disbursement of ADP fund to lower revenue collection in the first half of the current fiscal year.
Sams Uddin Ahamed, commissioner of the tax zone-2 in Dhaka, said one of the main sources of revenue of the zone was TDS from project implementation.
Collection of the zone did not increase significantly as fund disbursement of development budget was slow in the first half of the fiscal year, he said.
He said the zone had formed 15 committees which would monitor and ensure deduction of source tax immediately after the disbursement of any fund against any project.
Some other income tax zones responsible for collecting TDS from various sectors like construction and contractors related to implementation of development works raised the issue of slow ADP implementation.
Tax zone-Rangpur informed that it received only Tk 5 crore from the Barapukuria coal plant in the period against Tk 120 crore in the same period of last fiscal year.
The meeting decided to expedite monitoring of TDS process.
If necessary, NBR will take help of the finance minister to realise source tax from the government agencies as there are allegations that some agencies either do not deduct the tax or do not deposit it to the government exchequer, NBR officials said.
The NBR chairman also instructed the tax officials to expedite their efforts in the coming months to achieve the collection target for the current fiscal year.
Officials said that the tax authorities might also inform finance minister AHM Mustafa Kamal about the issue and seek his instruction at the meeting to be held at the NBR conference room today (Thursday).
Kamal is scheduled to visit NBR today for the first time after assuming office as finance minister, they said.