A Tk25,491 crore revenue shortfall in just two months, despite a 47 per cent or Tk1.94 lakh crore growth target, has prompted the government to intensify tax collection drives.
To increase collections, the National Board of Revenue (NBR) has been instructed to target one major industry each month, coordinate customs, value-added tax (VAT) and income tax enforcement, and identify businesses outside the tax system.
The pharmaceutical industry was the target in September. Another major sector has been selected for October, but officials declined to name it.
The drive has put revenue officials under pressure and raised fears among businesses of coercive enforcement.
“We’re being run off our feet,” a deputy commissioner at a Dhaka tax zone described the workload to TIMES.
NBR collected Tk55,562 crore against a target of Tk81,053 crore in July and August, while September’s performance remained weak, according to officials.
The government faces rising energy import costs, plans for a more expensive public-sector pay structure and growing development spending commitments.
The fiscal strain is already reflected in borrowing. The government took around Tk24,245 crore from the banking system in the first quarter of the current financial year, compared with net repayments during the same period last year.
NBR faces a Tk6,04,000 crore collection target for the 2026–27 financial year, against Tk4,10,390 crore collected last year. Meeting it would require Tk1,93,610 crore more revenue, an increase of about 47 per cent.
The target is part of the government’s Tk9,38,000 crore budget, which includes major development projects and plans to gradually double the public-sector pay structure.
Before taking office, the government had pledged not to pursue megaprojects. However, the Executive Committee of the National Economic Council has since approved projects worth several lakh crore taka.
Prime Minister’s Adviser on Finance and Planning Rashed Al Mahmud Titumir is overseeing the revenue mobilisation programme and the 2026–27 Budget Implementation Plan.
Under the programme, VAT officials must verify whether members of business associations hold the required Business Identification Numbers, while customs houses, land customs stations and specialised offices have been directed to maximise collections.
Major customs stations will face closer inspections, central and local intelligence units have been told to coordinate their activities, and field officials must join NBR task force meetings online.
At a recent meeting chaired by Titumir, officials were instructed to demonstrate progress in securing revenue for development programmes and the proposed pay structure.
NBR has also restored monthly VAT returns after quarterly filing, introduced in the current budget, after a decline in collections.
Businesses, on the other hand, fear that the government’s ambitious target, without corresponding institutional reforms, could encourage coercive enforcement.
Bangladesh Chamber of Industries President Anwar-Ul-Alam Chowdhury warned that tax officials might attempt to extract money forcibly from businesses.
“Since NBR has been given such a large target without reforms, there may be attempts to forcibly collect money from businesses. This has created anxiety among businesspeople,” he told TIMES.
Federation of Bangladesh Chambers of Commerce and Industry Administrator Fazlul Hoque said businesses were already struggling while government expenditure continued to rise.
“Business conditions are not good. The finance minister himself has said it will take two to three years. But government spending is rising,” he said.
Hoque urged officials to concentrate on tax evaders and businesses outside the tax net rather than burden existing taxpayers.
Former Bangladesh Garment Manufacturers and Exporters Association director Mohiuddin Rubel called for a fairer distribution of tax liabilities.
“Those earning more should pay more. At the same time, irregularities in tax collection must be stopped so that nobody can get away by paying less than their actual liability,” he told TIMES.
Economists say stronger enforcement must be accompanied by wider reforms and a recovery in economic activity.
Centre for Policy Dialogue Distinguished Fellow Mustafizur Rahman said revenue growth depends on stronger business activity, imports, exports and development spending, alongside technological improvements, institutional reform and staff training.
“Revenue cannot be increased simply by applying pressure,” he told TIMES.
Knowledge Hub Institute Trust President Khondaker Golam Moazzem said the economy could generate the targeted revenue, but the necessary reforms were missing.
“We have become one of the countries with the world’s lowest tax-to-GDP ratios because of exemptions, evasion, informality and the absence of automation,” he told TIMES.
He called for a rational tax structure and steps to bring businesses operating outside the formal system into compliance, including activities treated as informal despite belonging to organised sectors.
The wider economic environment offers little relief. The World Bank’s Bangladesh Development Update has warned that weak investment and exports, energy shortages and banking-sector problems will constrain growth.
Alongside warning of another inflation spike to 10.9 percent, the International Monetary Fund has projected only 3.2 per cent growth this fiscal year, nearly half of the 7.1 per cent in 2021-22.
The multilateral lender called for stronger revenue mobilisation, reforms, and maintaining a tight monetary stance.
NBR stops releasing monthly figures
NBR has stopped routinely releasing monthly collection data since the end of last fiscal year.
However, it reported a Tk25,491 crore shortfall for July and August to the government.
By the fourth week of October, September’s figures were yet to be disclosed. However, officials, seeking anonymity, described another substantial shortfall, with income tax performing relatively better than customs and VAT.
An NBR official said staff had been instructed not to disclose collection figures without authorisation.
“Previously, you received the figures every month. Now you won’t get them from any department. Nobody except the chairman will say anything,” the official told TIMES.
Officials said NBR Chairman Ahsan Habib might disclose the figures at a press conference later this month.
Habib declined to comment and turned down requests for the September data.
Govt borrowing accelerates
The government borrowed Tk23,227 crore from commercial banks and Tk1,017 crore from Bangladesh Bank in July–September, taking total bank borrowing to nearly Tk24,245 crore.
During the corresponding period last year, it had instead repaid Tk4,226 crore to commercial banks and Tk2,699 crore to the central bank.
The government has budgeted Tk1,12,000 crore in bank borrowing for the current financial year, raising concerns that greater public-sector demand for credit could constrain private investment.
Mustafizur Rahman warned that government borrowing now largely carries market-based interest rates rather than the concessional rates available previously.
Higher debt would increase future principal and interest repayments, adding to expenditure pressures and potentially limiting fiscal flexibility.
According to the economist, the combination of weak revenue, growing expenditure and greater reliance on borrowing amid a slowing economy leaves the government facing a difficult challenge – financing its commitments without excessive pressure on taxpayers or crowding out private investment.
