Robust cigarette and medicines sales helped the Large Taxpayers Unit (LTU–VAT) post a strong revenue growth in the first half of the current fiscal year.
The growth also offset weak performances in the mobile telecommunications and cement sectors, according to the National Board of Revenue (NBR).
As per data released by the LTU-VAT Commissionerate, cumulative revenue collection stood at Tk37,132 crore during the July–December period of FY26, up 28.28 per cent year-on-year.
NBR officials said the growth was largely driven by higher collections from the tobacco industry and pharmaceutical sector, while several traditionally strong sectors either stagnated or recorded declines, highlighting uneven economic activity across industries.
But despite the ongoing economic slowdown, the pharmaceutical sector – represented by 18 companies under the LTU-VAT Commissionerate – posted strong performance.
Revenue earnings from the companies grew by 22.7 per cent to about Tk2,618 crore during the first six months of the current fiscal year, the data shows.
Earnings from the sector were Tk2,132 crore in the same period last year.
The sector also exceeded its goal by 6.6 percent, reflecting steady demand for pharmaceuticals, with the six-month target set at Tk 2,454 crore.
NBR officials said the sales of locally produced medicine have surged following restrictions on Indian visas, which have limited travel for medical treatment in India.
Previously, many patients would visit India for healthcare and bring back at least six months’ worth of medicine, they added.
Since the implementation of the new visa restrictions, fewer people can travel and Indian medicines are no longer entering the country in the same volume, the officials said.
This shift has boosted reliance on domestic pharmaceutical products, resulting in a notable increase in revenue collection from the local medicine sector, NBR member (VAT implementation) Md Azizur Rahman told TIMES of Bangladesh.
According to IQVIA, which tracks prescription data from pharmacies covering 93 percent of outpatient activity, sales of prescribed medicines rose 9 per cent to Tk37,500 crore in the first nine months of 2025.
The cigarette sector, dominated by three major companies, contributed about Tk21,232 crore during the six-month period, nearly 57 per cent of the LTU’s total collection.
The figure represents a striking 46.99 per cent year-on-on-year growth. The sector also exceeded its half-yearly target of Tk20,054 crore by 5.87 percent.
An LTU official said the surge came from higher retail prices following tax adjustments, stronger compliance and steady demand.
“Despite public health concerns and higher taxation, cigarette sales have remained resilient. Price revisions and improved monitoring helped boost VAT collection significantly,” said Syed Atiqur Rahman, commissioner of the LTU-VAT Commissionerate.
In contrast, the telecom sector, once a reliable revenue generator, showed signs of fatigue.
Stagnation of revenue generation in the sector is mainly for the decline in SIM and talk-time sales. Besides, separation of tower services from the telecom sector has had an impact.
Revenue from the four major mobile operators reached Tk5,769 crore, virtually unchanged from Tk5,762 crore a year earlier, reflecting marginal growth of just 0.11 per cent.
As such, the sector missed its six-month target by more than 16 per cent.
Industry insiders blamed rising operational expenses, heavy spectrum costs and cautious consumer spending.
“Customers are spending less on discretionary services, and the cost of maintaining networks keeps rising. That directly impacts taxable margins,” said a senior official of Grameenphone.
However, some sectors showed resilience.
The banking sector, comprising 17 entities under the LTU, posted 20.84 per cent growth, contributing Tk2,578 crore compared with Tk2,491 crore a year earlier. Still, the collection fell short of the ambitious target of Tk3,314 crore.
Meanwhile, the gas sector remained steady, with revenue rising 10.92 per cent to Tk3,907.34 crore during the six-month period of the current fiscal year.
Officials said stable consumption and improved billing efficiency supported the performance.
The cement industry recorded the steepest fall among major sectors, reflecting the slowdown in construction and infrastructure activities.
VAT collection dropped 20.1 per cent year-on-year to Tk171.87 crore during the July-December period. The sector also missed its target by 32.7 per cent.
Sector insiders linked the decline to lower private construction, delayed public projects and higher input costs.
“With real estate and infrastructure demand subdued, cement sales grew by around 3 per cent in 2025. But the prices dropped significantly compared to that in 2024,” said Mohammad Amirul Haque, president of Bangladesh Cement Manufacturers Association (BCMA).
“Following this, revenue generation from the sector declined,” he added.
The beverage industry also registered healthy growth, with collections increasing 32.21 per cent year-on-year to Tk440 crore, up from Tk328 crore.
The sector nearly achieved its target, aided by strong seasonal demand and expanding distribution networks.
“The overall collection is encouraging, but the dependency on one or two sectors is not sustainable,” said Dr M Masrur Reaz, chairman of the Policy Exchange of Bangladesh.
“We want broader-based growth across industries, particularly manufacturing sectors, to ensure stable revenue,” he added.
