Corporate income tax collection by National Board of Revenue in first quarter of the current fiscal year fell Tk 292 crore short of target mainly because of cut in corporate tax rate by the government.
Officials of the Large Taxpayers Unit (income tax) of NBR said along with reduction in corporate tax rate for banks and non-bank financial institutions, typical slow business scenario in the country in first quarters contributed to the shortfall in corporate tax collection.
The government in the budget for the FY 2019 reduced corporate tax rate by 2.5 per cent for both publicly traded and non-publicly traded banks and non-bank financial institutions.
LTU managed to collect Tk 3,490 crore in July-September of the FY 2019 against the target of Tk 3,782 crore set for the period, they said.
Corporate tax collection also grew only by 8.38 per cent in the first quarter of the current fiscal year compared with that of the same period of last fiscal year when LTU collected Tk 3,220 crore in corporate tax.
Officials said that banks and other financial institutions like insurance and leasing companies paid tax on quarterly basis, four times a year.
LTU got less corporate tax in the first installment paid in September by the banks and NBFIs, they said.
The institutions will pay their second installment in December, they said, adding that the shortfall might widen further if the business scenario witnessed any dramatic improvement.
The government set the corporate tax collection target at Tk 21,500 crore with 27 per cent growth for LTU.
Around 60 per cent of LTU’s annual collection comes from banks.
Some 300 companies and business entities and 1,000 directors and owners of the companies pay tax at the LTU.
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