NBR misses revenue target for 13th year

The National Board of Revenue (NBR) has fallen short of its revenue collection target for the 13th consecutive year, with experts opining that the existing framework for tax collection is inadequate.

 The tax authority's overall receipts were Tk 370,874 crore in fiscal year 2024-25 (FY25), falling short of its revised target by Tk 92,626 crore.

 The government initially aimed to collect taxes of Tk 480,000 crore in FY25 but ultimately slashed the target by Tk 18,500 crore.

 As per provisional data, the NBR failed to achieve its tax collection target despite registering a 2.23 percent growth in collections in FY25, against a growth of 15 percent in FY24. The news comes a month after the government announced the national budget for FY26, which tasked the NBR with collecting Tk 499,000 crore.

 The new goal is overly ambitious, considering that it is 35 percent higher than what was actually collected last fiscal year.

 It is also 4 percent higher than the previous target. The annual growth in tax collection has been hovering at around 11 percent on average for the past five years.

 "The target set in the budget is not realistically achievable with the kind of tax measures currently being proposed," said Towfiqul Islam Khan, a senior research fellow at the Centre for Policy Dialogue (CPD).

 According to him, the only viable way to approach the target is by seriously curbing tax evasion.

 In April this year, the CPD unveiled a study estimating that Bangladesh lost around Tk 226,236 crore in tax revenue in FY23 due to evasion and avoidance. Of this, nearly 50 percent was attributed to corporate tax evasion.

 Khan said the current fiscal framework mirrors the old pattern from the Awami League era, which was toppled last year following a mass uprising.

 "It's not realistic either on the income side or on the expenditure side. The revenue mobilisation targets and the spending plans simply don't align," he said.

 He urged the government—more specifically, the Ministry of Finance—to acknowledge this mismatch and come up with a revised budget before the end of the fiscal year.

 "The expenditure plan, in particular, needs to be adjusted. If not, we end up with arbitrary prioritisation, which leads to inefficient use of resources and weakens value-for-money outcomes," Khan explained.

 He further noted that setting an overly ambitious revenue target while drafting a mismatched expenditure plan creates systemic imbalances.

 "Towards the end of the year, lower Annual Development Programme (ADP) spending might temporarily save the situation, but that's not sustainable. The system itself is flawed. You can't continue like this indefinitely," he warned.

 For instance, in the first 11 months of last fiscal year, the government managed to spend 49 percent of the total allocation, according to data released by the Implementation Monitoring and Evaluation Division of the planning ministry.

 Khan also emphasised the need for enhancing automation and comprehensive reforms in revenue administration, which he believes are essential for improving tax collection efficiency.

 The NBR has also failed to meet the condition of the International Monetary Fund (IMF), as the multilateral lender set a target for collecting nearly Tk 4.55 lakh crore by the end of FY25.