NBR misses target by Tk 60,110 crore despite 13% growth
Revenue collection by the National Board of Revenue (NBR) grew 13 percent year-on-year to Tk 2.24 lakh crore in the July-January period of fiscal year 2025-26 (FY26), driven largely by strong VAT receipts from domestic trade and economic activity.
Yet, the country’s largest tax collector missed its target by 27 percent, a shortfall of Tk 60,110 crore, for the period, according to provisional data.
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The immediate-past interim government in late November revised NBR's full-year revenue target to Tk 5.54 lakh crore after a strong first quarter, up from Tk 4.99 lakh crore.
To meet the full-year target, the board would need to collect Tk 3.30 lakh crore in just the remaining five months of the fiscal year, which economists say is an unrealistic goal.
Persistent inflation, sluggish implementation of development projects, and a broader economic slowdown make such a surge virtually impossible.
According to a paper by Towfiqul Islam Khan, additional director (research) at the Centre for Policy Dialogue (CPD), the total revenue shortfall for FY26 will exceed Tk 1 lakh crore, much like what was recorded in FY25.
“Bangladesh is now in a position where it cannot meet recurrent operating expenditure with domestic revenue mobilisation,” Khan said while presenting a paper at a Citizen's Platform for SDGs briefing last week.
He described the country as facing "diminishing fiscal space," with borrowing for debt repayment rising significantly and non-development expenditure squeezing policy room further.
“The budget for FY26 has also made some lofty fiscal framework targets,” he said.
Additional pressure is mounting from election-related costs and the need to inject capital into distressed financial institutions.
A recourse to bank borrowing reflects this tightening.
Net borrowing from the banking sector crossed Tk 48,800 crore by January 25, nearly five times the Tk 10,558 crore borrowed in nearly the same period a year earlier, according to Bangladesh Bank provisional data.
Within the July-January tax receipts, VAT (value-added tax) from domestic activity was the largest contributor at 38 percent of total collection, rising 16.45 percent year on year to Tk 85,769 crore.
Direct taxes -- income and corporate -- accounted for 33.5 percent, climbing 13 percent to Tk 75,055 crore. Import tariffs grew more modestly, up 8 percent to Tk 62,813 crore.
Overall receipts increased at a faster pace in the July-January period of FY26 than a year ago, when the tax administration logged only 2 percent growth.
Growth in January 2026, however, slowed sharply to just 3.21 percent compared to the same month last year.
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