NBR struggles to meet revenue target despite end of movement

Muhammad Ayub Ali :

In the first two months of the current fiscal year (July–August), the National Board of Revenue (NBR) fell short of its collection target by Tk 6,577 crore, underscoring persistent challenges in revenue mobilization even after the end of the recent movement that disrupted economic activity.

According to latest data released by the NBR on Sunday, the revenue collection target for July–August was Tk 61,000 crore. Actual collections stood at Tk 54,423 crore—over 10 percent below the target.

The shortfall was evident across customs, VAT, and income tax, reflecting both weak enforcement capacity and subdued domestic demand. Officials admitted that the revenue crisis is not new.

The previous fiscal year had already seen significant setbacks, particularly in May and June, when protests and administrative disruptions slowed collection.

Hopes of a quick rebound after the movement subsided have so far proved misplaced.

Insiders say internal uncertainty within the NBR has compounded the problem. “After the movement, many officials remain worried about dismissal or sudden transfers.

As a result, revenue collection has not received the kind of priority it requires,” said one NBR official, speaking on condition of anonymity.

A sector-wise breakdown shows that Value Added Tax (VAT) continued to anchor the revenue base, contributing Tk 22,437 crore in July–August. Customs duty generated Tk 17,248 crore, while income tax accounted for Tk 14,738 crore.

Economists, however, note that growth in customs and income tax collections has lagged due to reduced import volumes, stagnant business activities, and cautious investor sentiment.

Experts warn that an early shortfall of this magnitude could intensify fiscal pressure, particularly on development spending and subsidy management.

They stress the urgent need for structural reforms, broader tax coverage, and stronger enforcement mechanisms to reduce dependence on borrowing.

Bangladesh’s tax-to-GDP ratio remains one of the lowest in South Asia, raising concerns about the government’s ability to meet its ambitious budgetary commitments.

Analysts caution that without swift confidence-building measures and modernization of tax administration, the revenue gap may widen further in the coming months.