Revenue falls Tk31,000cr short of target in Jul-Oct

Revenue collection fell nearly Tk31,000 crore short of the target in the first four months of the current fiscal year, which experts attribute to an economic slowdown and political instability stemming from the July-August uprising.

Despite this, they remain optimistic about economic stabilisation in the coming months. This optimism is driven by momentum in exports and remittances, growing business confidence, and the expectation of fund disbursements from development partners, all of which could boost revenue.

According to data from the National Board of Revenue (NBR), the collection stood at Tk101,282 crore against the target of Tk132,114 crore for the July-October period. The collection was Tk1,055 crore, or 1%, lower than the same period in the last fiscal year.

Md Farid Uddin, a former member of the NBR, told The Business Standard that following the student-people uprising, the country's economy has experienced a slowdown. Additionally, considering the state in which the previous government left the economy, a deficit of over Tk30,000 crore compared to the target is normal.

"I think, given the situation, this deficit could have been even higher," he said.

However, he added, "Exports and remittances are performing well. The disbursement of funds from development partners may begin this month or next, which could be utilised in the budget. Moreover, the economy has started to recover. As a result, revenue collection may improve further from January."

Towfiqul Islam Khan, a senior research fellow at the Centre for Policy Dialogue (CPD), told TBS that the revenue collection situation improved slightly in October compared to the previous three months.

Notably, revenue collection from July to September of the current fiscal year was 6% lower year-on-year, but by October, the shortfall had reduced to 1%.

However, the economist believes that one of the major reasons for such a large gap is the unrealistic revenue target. He said, "The budget should be revised within the current month, and the revenue target should be adjusted accordingly."

He further said while there may be some relief for the economy in the coming months, the extent of normalisation will depend on how quickly law and order stabilizes. This is closely tied to business confidence, which in turn impacts revenue collection.

According to NBR data, Tk21,822 crore was collected in July, followed by Tk21,629 crore in August, Tk29,000 crore in September, and Tk31,880 crore in October.

Between July and October, import tax and value-added tax (VAT) collections declined by over 1% and 5% year-on-year, respectively. Income tax, however, performed better than both import tax and VAT, increasing by about 2%.

Despite the country's unstable situation, Professor Mustafizur Rahman, a distinguished fellow at the CPD, remarked that revenue should have increased further due to high inflation.

"Although revenue collection was disrupted in July and August, there should have been growth during this period considering the high inflation," he said. "However, it is encouraging to see that the revenue collection situation improved since September."

According to data from the Bangladesh Bank, import payments rose by 1.47% year-on-year in July-October, compared to a decline of over 13% in the first two months of FY25.