H1 import duty: Receipts from top 20 items dip

FT ONLINE

Tax collection from the top 20 imported items has plummeted by 39 percent during the first half of the current fiscal year, in a major blow to the revenue target.

The National Board of Revenue, or NBR, received Tk 34.11 billion in July-December from the key revenue-spinning imports, down by Tk 21.06 billion from the year-earlier period.

High-speed diesel, crude soybean oil, base-oil, steel-made line pipe, mobile phone, rice, black tea, road tractors for semi-trailers and flat-rolled products are among the traditional key sources of tariff collection.

An analysis of the customs policy wing of the tax authority on the revenue collection has revealed the dismal import scenario.

During the July-December period of the year, the customs wing missed the target by 29 percent, facing a shortfall of Tk 130.31 billion.

However, the wing received 2.42 percent higher revenue during the period than that of the same period last fiscal.

Officials seem to blame the ambitious target, saying the government has set the revenue collection target at 45.69 percent higher than the customs wing's actual receipt collection during the last financial year.

In its analysis, the customs wing also found the number of tax exemptions availed by different sectors to go up by 12 percent during the period.

A comparative statement of import consignments released under exemptions said that revenue collection fell by 12 percent during the past six months.

A senior official said the trend in offering tax waivers has seen a rapid rise in the half-yearly period.

Up to December, the NBR has offered general and special exemptions, valued at Tk 223.28 billion, up by 23.22 billion against the release of imported products.

The official said the import of products enjoying duty waiver increased with the implementation of different mega projects such as Padma bridge, metro-rail, Karnaphuli tunnel, Rooppur nuclear power plant, etc.

The import of products falling under the zero tariff-slab jumped by 35 percent or 442 tonnes, the analysis said.

The area of VAT exemption of zero-duty products also increased causing a Tk 28.63 billion shortfall or 62 percent plunge in import tariff collection from this area.

However, the revenue collection from five duty-slabs, 1, 5, 10, 15, 25 percent increased by 23 percent in the period.

The customs wing's analysis said the revenue collection from the import of motorcycle plummeted by 55 percent as the local industry is now producing or assembling the item.

The drop-off has been reflected in the import trend. The import of motorcycles dipped by 44 percent during the same period.

Import of high-speed diesel also declined by 3,17,135 tonnes or 16 percent causing a 15 percent negative growth in revenue collection from it.

Power plants have shifted towards using liquefied natural gas, or LNG, and duty-free furnace oil from high-speed diesel in their units, the NBR analysis has discovered.

The import of diesel used to contribute 85 percent of the duty collected from the petroleum sector.

Customs officials said prices of some items such as powdered milk, steel, fuel oil declined in the international market, which dragged down revenue collection.

They said the country's investment, in general, has not increased, except for economic zones, export processing zones and hi-tech parks.

According to the seventh five-year plan, the government adopted the policy of gradually decreasing the dependency on the import revenue to facilitate global trade. Currently, customs revenue contributes 12 percent of the total tax receipts.

Earlier, the government had planned to bring it down to 9.0 percent by 2020.