April revenue growth drops below 7%, 10-month deficit nears Tk1.04 lakh crore
The shortfall is the highest on record, according to NBR officials familiar with the matter.
The National Board of Revenue (NBR) has missed its revenue collection target by nearly Tk104,000 crore in the first 10 months of the 2025-26 fiscal year, amid sluggish growth in tax receipts and an ambitious government target.
The shortfall is the highest on record, according to NBR officials familiar with the matter.
Experts say that although revenue collection may pick up in the final two months of the fiscal year, the government is still likely to face an overall shortfall of at least Tk1 lakh crore.
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An NBR official, speaking on condition of anonymity, told The Business Standard that revenue collection in April grew by only 6.71% compared with the same month last year, well below the average monthly growth rate of around 14% recorded in previous years.
Although revenue growth remained relatively strong in the early part of the fiscal year, collection momentum weakened later, affecting the overall performance during the July-April period.
According to preliminary NBR estimates, revenue collection in the first 10 months of the fiscal year rose by 10.60% year-on-year.
Towfiqul Islam Khan, additional research director at the Centre for Policy Dialogue, told The Business Standard, "During the previous government's tenure, revenue targets were set beyond the economy's actual capacity. Combined with the current economic slowdown, this has created a major gap in revenue collection."
He said a large share of government revenue is linked to implementation of the Annual Development Programme (ADP), and slower project execution during the current fiscal year had reduced VAT and other tax collections tied to development spending.
"That is one of the reasons behind the slowdown in revenue growth," he said.
Towfiqul added that higher fuel prices and a possible rise in revenue collection during the final two months of the fiscal year could help narrow the gap slightly.
"Even then, the revenue shortfall at the end of the fiscal year could still exceed Tk100,000 crore," he said.
VAT collection falls
NBR officials said that in April, import tax and income tax collection grew by 18% and 14.66% respectively compared with the same period last year. However, VAT collection declined by 3%.
According to officials, around 55% of VAT collected by the NBR comes from ADP-related activities and public sector institutions, including electricity and gas utilities.
Syed Mushfequr Rahman, a member of the VAT implementation wing at the NBR, told TBS, "ADP implementation has slowed, which is why VAT collection is also declining."
"The information we are receiving from the field level suggests that VAT receipts from public institutions are lower than expected. We will have a clearer picture once we get the full data on which other sectors are contributing less," he added.
Challenge next fiscal
The government is preparing to set a combined revenue collection target of Tk695,000 crore from NBR and non-NBR sources in the next fiscal year.
According to CPD estimates, based on projected revenue collection in the current fiscal year, the implied growth target for next year would be around 42%.
Towfiqul described the target as unrealistic. "The highest revenue growth in Bangladesh's history was 27% in fiscal year 2007-08. The likelihood of achieving the projected growth target next fiscal year is very low," he said.
"As a result, a large revenue shortfall is likely to persist in the next fiscal year as well."
