Revenue shortfall hits record Tk98,000cr in nine months
Officials said the increase was not sufficient to keep pace with the target set for the year
The country's revenue collection has hit a historic deficit of approximately Tk98,000 crore against the target in the first nine months of the current fiscal 2025-26, surpassing the total shortfall recorded in any previous full financial year.
The National Board of Revenue data shows that the gap has already exceeded the Tk92,000 crore shortfall seen in the entirety of the last fiscal year, with experts warning that the deficit will widen further by June.
In March – the first full month under the new administration – revenue collection fell short of the monthly target by nearly Tk26,000 crore, growing by a mere 2.67% compared to the same month last year.
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Speaking to The Business Standard, economists and NBR officials attributed the weak performance mainly to lower imports caused by the Middle East conflict, sluggish domestic economic activity, continued revenue leakage, and an overly ambitious target that did not reflect the tax authority's actual capacity.
Despite the widening shortfall, overall revenue collection during the first nine months of the fiscal year increased by more than 11% from a year earlier.
Officials said the increase was not sufficient to keep pace with the target set for the year.
"The economy has slowed, revenue leakage has not been contained and imports fell in March because of the Middle East conflict," an NBR official said. "At the same time, the revenue target was set without taking into account the actual capacity and limitations of the NBR."
Economists warned that the weak revenue performance is creating immediate pressure on the new government, which is already facing higher spending commitments.
According to NBR data, import tax receipts in March declined from the same month a year earlier, while value-added tax and income tax collections rose by 4.86% and 2.77%, respectively.
Import duties account for the largest share of revenue collected by Chattogram Custom House.
Its commissioner, Shafi Uddin, said imports fell because of the Middle East conflict, reducing import tax collection.
He also said one of the country's largest taxpayers, Eastern Refinery, remained shut in March, leaving the government without any revenue from the company during the month.
In March of the previous fiscal year, Eastern Refinery alone had paid Tk500 crore in revenue, he said. "Because the refinery remains closed, the government is also unlikely to receive revenue from the company in April."
Bangladesh Bank data also shows that imports in March fell by nearly 27% from a year earlier.
Snehasish Barua, a tax expert and chartered accountant, said the Middle East conflict and weak domestic economic conditions both contributed to the decline in revenue collection.
"Alongside the Middle East crisis, there was little dynamism in the domestic economy in March. That is one of the reasons why revenue collection fell," he said.
A review of NBR data over recent years shows that revenue collection has repeatedly weakened during periods of domestic and international disruption.
Tax receipts fell sharply during the Covid-19 pandemic in 2020, during the July uprising in 2024 and during the protests by NBR officials in June 2025.
Zahid Hussain, former lead economist at the World Bank's Dhaka office, said Bangladesh's revenue performance is being held back by slower economic growth, weak institutional capacity and the lack of reform within the NBR.
"An external shock has further weakened growth," he said. "As a result, consumer spending is falling and the private sector has not expanded. These are among the main reasons behind the lower revenue collection."
Zahid also said the large shortfall was partly the result of an excessively ambitious target, a mistake that he believes the government is preparing to repeat in the next budget.
The government set a revenue target of Tk6.97 lakh crore for FY26.
"How the government plans to raise such a large amount remains unclear," Zahid said. "This creates a major challenge for the new government, and that challenge will become even greater if it adopts an expansionary budget."
Commenting on pressure from the International Monetary Fund, the economist said the lender wants to see whether the government is taking effective steps to meet the targets it has set for Bangladesh.
