Devt partners push govt for tougher tax measures amid debt pressure: NBR head

NN ONLINE:

Facing rising external debt and limited fiscal space, the government is under pressure from development partners to boost revenue through tougher tax policies and reduced exemptions, said NBR Chairman M Abdur Rahman. He shared the remarks while speaking at the ‘Meet-The-Business’ stakeholder engagement programme held at the Multipurpose Hall of the National Board of Revenue (NBR) in the city.

Abdur Rahman said Bangladesh’s mounting debt obligations and the need for sustainable budget financing have left very limited choices beyond enhancing domestic revenue collection rather than resorting to repeated external borrowing. The NBR chairman said development partners are continuously monitoring Bangladesh’s fiscal performance, including debt servicing capacity and revenue measures.

According to the NBR Chairman, a proposal was recently raised regarding the extension of the earlier facility on foreign loan interest payments, which expired on 31 December 2024. He, however, clarified that the matter is directly linked with the national budget framework and therefore cannot be decided solely by the revenue authority. Abdur Rahman said Bangladesh’s low tax-to-GDP ratio is often attributed to a long-standing culture of tax exemptions, a practice that has continued for nearly five decades.

Although exemptions were historically provided as part of development needs, the Chairman stressed that the economic situation now requires a fundamental shift towards a more disciplined and equitable tax structure.

To address this, the government has introduced a Revenue and Tax Expenditure Policy this year and amended multiple tax-related laws, including those related to income tax and customs. Under the new directive, the NBR and ministries will no longer have the authority to grant any tax exemption. “From now on, all exemption decisions will be made only by Parliament — the direct representatives of the people. They will determine which sector, project, or entity deserves any exemption and to what extent,” the NBT chief said.

Referring to foreign lenders’ request for exemption on interest payments for loans provided to Bangladesh, the Chairman said that under current laws, it is not possible to grant such waivers. The matter will be placed before the next Parliament for a final decision.

Abdur Rahman emphasised that Bangladesh must ensure that tax policy protects national interest, fiscal discipline and sustainability, while maintaining transparency and accountability. Bangladesh is now prioritising domestic resource mobilisation, rational tax expenditure, and long-term structural reforms to secure macroeconomic stability.