Government revenue collection in the July-October period, the first four months of the current fiscal year of 2023-24, slowed to 12.68 percent despite higher income tax growth.

From July to October, the National Board of Revenue (NBR) collected revenue of Tk 102,445 crore compared to Tk 90,917 crore in the same period of the previous year, according to the NBR's provisional data.

In the first four months of the previous fiscal year, revenue collection growth was 14 percent. In October this year, revenue collection growth stood at 8 percent.

The target for revenue collection for the period was Tk 116,294 crore, meaning there was a deficit of Tk 13,849 crore.

A top official of the NBR said the business sector enduring a sluggish period due to the foreign exchange crisis was the prime reason for the relatively slower growth.

Adding to that was the central bank adopting a contractionary monetary policy, resulting in credit growth also slowing down, and a drop in government expenditure due to austerity measures amid macroeconomic pressure stemming from Russia's invasion of Ukraine.

Another NBR official said revenue collection may slow further as businesses are being squeezed by political unrest ahead of the national elections.

He hoped revenue collection would rebound after the election.

Abu Hena Md Rahmatul Muneem, chairman of the NBR, said revenue collection would be very challenging if political unrest persists in the coming months.

"This is an election year. The country is also facing a dollar crisis. Imports have lessened and business slowed. If political unrest persists in the coming months, revenue collection will obviously be affected," Muneem said during an event held at his office two weeks ago.

Zahid Hussain, a former lead economist of the World Bank's Dhaka office, said: "The current revenue collection growth is not bad in the present context. Imports dropped 25 percent so production is being affected. The inflation rate is also high. In this situation, 12 percent growth in revenue collection is good."

"It was possible because the price level has been hiked amid the devaluation of the local currency. So, a positive impact was seen in value-added tax," he added.

According to the NBR's provisional data, income tax revenue grew 16.71 percent to Tk 31,259 crore in the four-month period.

In the same period, local VAT collection rose 12.39 percent to Tk 38,432 crore while tax collection from imports and exports advanced 9.41 percent to Tk 32,753 crore.