NBR under pressure amid revenue gap
Bangladesh’s fiscal management has come under fresh pressure as the National Board of Revenue recorded a revenue shortfall of more than Tk1 lakh crore in the first 10 months of the current fiscal year, raising serious doubts over the government’s ability to meet its annual revenue target.
According to the latest data, NBR collected Tk3,26,928 crore during the July-April period of FY2025-26 against a revised target of Tk4,31,461 crore.
This left the revenue authority with a shortfall of Tk1,04,533 crore.
The Centre for Policy Dialogue disclosed the figures on Thursday while presenting its third reading of the Independent Review of Bangladesh’s Development in Dhaka.
The report, titled “State of the Bangladesh Economy in FY2025-26: Multidimensional Challenges during the Transition Period,” was presented by CPD Executive Director Dr Fahmida Khatun.
CPD said the government’s revenue target has now become “operationally unrealistic,” as the gap between actual collection and the required target has widened sharply.
Although NBR tax collection grew by 10.6 percent during the July-April period, the pace remains far below what is needed to achieve the full-year target.
CPD estimated that NBR would now need 128.6 percent growth in the remaining two months of the fiscal year to meet the government’s annual growth target for tax collection.
Analysts said such a jump is almost impossible under the current economic situation.
The revenue weakness has also created concern over Bangladesh’s commitments under the International Monetary Fund programme.
CPD warned that the large shortfall may make it difficult for the government to meet upcoming IMF revenue-related conditions.
The pressure is not limited to NBR alone. According to Ministry of Finance data cited by CPD, total revenue collection grew by only 6.9 percent during the July-March period of FY26, down from 7.9 percent in the same period of the previous fiscal year.
CPD said weak economic activity, slow development spending and delayed implementation of reforms have all contributed to the revenue slowdown.
The sluggish implementation of the Annual Development Programme has also affected revenue flow.
Development spending remained much lower than the historical trend during the July-April period, reducing tax collection from project-related purchases, imports, contractors and service providers.
At the same time, the government has become increasingly dependent on bank borrowing to finance the budget deficit.
CPD warned that excessive borrowing from the banking system could reduce the availability of credit for the private sector, affecting investment and job creation.
The think tank also pointed to structural problems in the country’s revenue system.
These include weak tax compliance, limited progress in tax expenditure management, slow institutional reforms and lack of timely public finance data.
CPD said the separation of the Revenue Policy Division and the Revenue Management Division is yet to be fully operationalised.
It also noted that the government still needs stronger transparency, better data reporting and more effective enforcement to improve revenue mobilisation.
While mandatory electronic filing of personal income tax returns has been introduced, broader reform of the tax administration remains uneven, the report said.
Economists said the latest figures show that Bangladesh’s revenue problem is not only a short-term collection failure but also a structural weakness.
The country has long struggled with a low tax-GDP ratio, narrow tax base and high dependence on indirect taxes.
They said the government must focus on expanding the tax net, reducing exemptions, improving VAT enforcement, strengthening income tax compliance and stopping revenue leakages.
CPD said revenue mobilisation must be strengthened through credible governance reform, better tax efficiency and reduced fiscal leakages.
Without these steps, the government may face growing difficulty in financing public spending, development projects and social protection programmes.
The think tank warned that the fiscal challenge will become more serious if ambitious revenue targets continue to be set without realistic implementation capacity.
Experts said the government should avoid setting politically attractive but practically unattainable targets in the upcoming budget.
Instead, they called for a realistic revenue plan based on administrative capacity, economic conditions and measurable reform outcomes.
The latest shortfall has therefore become a major warning sign for the economy.
Unless revenue collection improves through structural reforms, Bangladesh may face tighter fiscal space, higher borrowing pressure and greater difficulty in maintaining macroeconomic stability.
