Govt revises NBR's revenue target upward by Tk55,000cr

 Although revised targets are usually lowered midway through a financial year, this year is an exception as the government has increased the revenue target for the current fiscal 2025-26 by Tk55,000 crore, raising it from the existing Tk4.99 lakh crore.

This means the existing target is being raised by about 11%. And compared to what was collected in FY2024-25, the new target requires a 49% increase – which some experts believe is practically impossible.

According to relevant sources, the finance ministry has already conveyed the new target to the National Board of Revenue (NBR). Based on this, the revenue board has fixed enhanced collection targets for its field offices and communicated them accordingly.

A finance ministry official, speaking to The Business Standard on condition of anonymity, said the higher target was set as part of efforts to reduce the deficit and manage increased expenditure.

The NBR also considers the new target challenging.

NBR Chairman Abdur Rahman Khan told TBS, "Achieving higher revenue as per the new target will be challenging, yet we will try our best to meet it."

He, however, added, "The economic situation has not improved significantly, and there are issues in certain sectors, including banks."

According to NBR data, in the first four months (July to October) of FY2025-26, revenue collection grew by slightly less than 16% compared to the same period of the previous fiscal year. During this period, collections fell short of the target by Tk17,219 crore.

Towfiqul Islam Khan, additional director (Research) at the Centre for Policy Dialogue (CPD), said the NBR is already far behind the existing target, and thus the additional Tk55,000 crore – effectively a 49% increase – is not achievable.

He told TBS, "Even under normal circumstances, the government's overall revenue collection falls far short of targets. And this year an election will be held. There is also no major economic momentum. Under such conditions, it is unclear what considerations led to setting a higher revenue target.

"Previous governments used to do this – setting large targets and failing to achieve them – which created a credibility gap regarding budgets and targets. We need to break out of this cycle…It also needs clarification whether this has anything to do with the IMF."

An analysis of Bangladesh's revenue collection data shows that in the last two and a half decades the government increased the revised revenue target above the initial target only once. During the military-backed caretaker government in FY2007-08, collections exceeded the target by a large margin – nearly 27% – the highest growth rate recorded to date.

In other years, the revised target was kept the same as the original, or was reduced.

NBR statistics show that over the last five years, average revenue growth has been close to 15%.

Dr Muhammad Abdul Mazid, who served as NBR chairman during FY2007-08, told TBS, "Considering the size of the country's economy, revenue collection remains low. So, there is scope to increase collection."

Noting that Bangladesh's tax-to-GDP ratio is the lowest among Asian countries, he said, "If taxes are properly collected from those who are supposed to pay, this target can be achieved."