Tk57,000cr in extra revenue not possible to realise, NBR tells IMF

Officials of the National Board of Revenue (NBR) yesterday said it is not possible to raise an additional Tk57,000 crore in revenue in the upcoming fiscal 2025-26 – a target set by the International Monetary Fund (IMF).

They said the authorities can increase revenue collections by only Tk8,000 crore – just one-seventh of the target – through policy measures in FY26.

During a meeting held at the NBR headquarters in the capital's Agargaon today (9 April), the NBR officials presented the visiting IMF delegation with projections on potential tax exemptions to be phased out, areas where tax rates could be increased, and the corresponding revenue forecasts for the upcoming fiscal year.

The multilateral lending agency stipulated that no exemptions – scheduled to expire this fiscal year under sunset provisions – should be extended beyond June.

However, the NBR officials informed the IMF delegation that it would not be feasible to withdraw all exemptions by the June deadline, citing the country's current economic situation and its ongoing reality of industrialisation.

During the discussion, the IMF team acknowledged the current state of the economy and considered some of the arguments made by the NBR officials regarding the limitations of increasing taxes. However, according to officials present at the meeting, the IMF did not indicate any willingness to revise down the Tk57,000 crore revenue target.

"After the VAT hike in January on about 100 products and services, it is nearly impossible for us to collect an additional Tk57,000 crore solely through tax increases and reduced exemptions," a senior NBR official told The Business Standard on condition of anonymity.

He added, "We presented a detailed calculation of possible tax hikes and collections, which show a maximum mobilisation of around Tk8,000 crore in FY26."

According to NBR sources, revenue projections from the withdrawal of certain exemptions and increased taxes are approximately Tk4,500 crore from the income tax wing, Tk3,000 crore from VAT and Tk500 crore from customs.

The additional revenue target set by the IMF for the next fiscal year is to be achieved solely through tax policy changes. Other administrative measures – such as curbing tax evasion, recovering arrears, enhancing automation, or relying on natural economic growth – are not included in this calculation.

Explaining such a significant gap between the NBR's projections and the IMF's condition, another NBR official said, "We've communicated what is realistically achievable. It's not feasible to cancel all exemptions abruptly, and there's limited scope for large-scale tax increases."

He added, "We've tried to convey this reality to them. At that time, we presented the facts to the IMF delegation and they appeared to be trying to understand. Hopefully, they will revise down the target to something more realistic."