Revenue collection rises by 14%, yet falls Tk69,000cr short of target in H1

In the first half of the current 2025-26 fiscal year – from July to December – revenue collection by the National Board of Revenue (NBR) increased by 14% compared with the same period of the previous fiscal year.

However, collection fell Tk68,995 crore short of the target. In the same period last fiscal year, the shortfall stood at Tk57,891 crore. NBR officials and experts attribute the large deficit primarily to the ambitious targets set for the current year. They also cite the lack of the expected momentum in the economy and insufficient enthusiasm among field-level officials to boost revenue by preventing evasion.

According to the latest data released by the NBR, revenue collection in December rose by just over 10% compared with the same month of the previous fiscal year. Growth rates in earlier months had been higher. In December alone, the shortfall against the target amounted to Tk12,536 crore.

Statistics show that against a target of Tk2,31,205 crore for the first six months, actual revenue collection stood at Tk162,210 crore. During this period, collection increased by over 14% compared with the same period last fiscal year.

However, to meet the overall target set for the NBR, revenue collection would need to grow by 53% compared with last year.

Experts say there is no precedent in Bangladesh's history for revenue growth at such a high rate.

Towfiqul Islam Khan, additional research director at the Centre for Policy Dialogue (CPD), told The Business Standard, "At the time of the last budget, we had already said that this target was unattainable. Later, another Tk55,000 crore was added to the target. As a result, the total target has become quite ambitious."

"As a result, there could be a large shortfall at the end of the year," he said.

He added, "There is no explanation as to what basis the government added an additional Tk55,000 crore to the NBR's target. It may have been done to align with IMF targets, but this is nothing more than 'eye-wash'."

Md Farid Uddin, a former member of the NBR, said, "There is no likelihood of such momentum in the economy over the next six months that would make it possible to achieve such a large target. This means the institution is heading towards a massive shortfall compared with the target."

He said that since the 2016–17 fiscal year, the government has been presenting large expenditure budgets, which led to correspondingly high revenue targets, resulting in deficits every year.

However, he noted that given the size of Bangladesh's economy, achieving this level of revenue collection is not impossible. But the necessary reforms have not been undertaken. As a result, it will not be possible to formalise the largely informal economy – accounting for more than half of economic activity – and revenue will not be collected in line with the targets.

A tax zone commissioner at the NBR, speaking on condition of anonymity, said that even the target set at the beginning of the year would have been difficult to achieve under the current circumstances. With the target later increased further, achieving it has become practically impossible.

At the start of the fiscal year, the NBR's revenue target was set at Tk4,99,000 crore. Last month, it was raised to Tk5,54,000 crore.

The official added that with an election scheduled for February, there are no signs of a sudden acceleration in the economy thereafter. Even if momentum does pick up, revenue collection will not increase at such a high rate in practical terms.

According to NBR data, in the first half of the fiscal year, income tax collection increased by 14.67%, VAT by nearly 20%, and import tax growth remained below 7%.