Revenue Shortfall Exceeds Tk 500 Billion in Four Months

The gap between the monthly revenue collection targets and actual receipts continues to widen due to sluggish economic activity

Anisur Rahman Anis

Revenue collection has fallen more than Tk 500 billion short of the target. According to preliminary estimates by the National Board of Revenue (NBR), revenue collection in the first four months (July–October) of the current 2026–27 fiscal year stood at less than Tk 1.28 trillion, against a target of approximately Tk 1.78 trillion.

Available information suggests that the NBR made considerable efforts to achieve its revenue collection targets during the past four months. However, the country's economic conditions and the pace of domestic economic activity remained sluggish, with stagnation across multiple sectors.

Despite continued efforts by the NBR to collect revenue from an ailing economy, the overall circumstances were far from favourable. Consequently, the current revenue collection scenario is largely expected and reflects the prevailing economic reality.

The gap between the monthly revenue collection targets and actual receipts continues to widen due to sluggish economic activity.

Earlier, the revenue shortfall stood at approximately Tk 430 billion during the first quarter of the fiscal year, covering July to September. According to relevant NBR sources and economists, the situation has resulted from a lack of expected momentum in the domestic economy, unrealistic revenue targets and various policy constraints.

Despite the substantial shortfall, revenue collection during the first four months recorded some growth compared with the corresponding period of the previous fiscal year. However, the growth rate remained below 6 per cent. During the same period of the previous fiscal year, revenue collection had recorded growth of more than 16 per cent.

According to the statistics, the most vulnerable position has emerged in the Value Added Tax (VAT) sector. Although income tax and import duty collection recorded growth of around 14 per cent over the four months, there was no progress in VAT collection. Instead, VAT receipts declined by approximately 6 per cent compared with the corresponding period of the previous fiscal year.

A senior NBR official, speaking on condition of anonymity, said the significant gap in revenue collection was largely reflected in the figures because the growth targets had been set at an exceptionally ambitious level.

He noted that a substantial portion of VAT revenue comes from the implementation of government development projects. As project activities generally remain limited at the beginning of a fiscal year, revenue collection from this sector has been relatively low. In addition, VAT collection from several major sectors, including tobacco products, has fallen short of expectations.

The international and domestic economic situations are also hampering revenue collection. However, the official expressed hope that collection would improve in the coming months.

In the budget for the current 2026–27 fiscal year, the government has set a total revenue collection target of Tk 6.04 trillion, which is 45 per cent higher than the actual collection in the previous fiscal year. There is no precedent in the country's fiscal history for such a steep increase in annual revenue collection targets.

Revenue collection grew by 12 per cent in the 2025–26 fiscal year, while the average growth rate in previous years was around 15 per cent.

Economists had expressed doubts about the ambitious target from the time the budget was announced. Dr Zahid Hussain, former lead economist at the World Bank's Dhaka office, said it had been pointed out during the budget presentation that achieving the target would not be feasible. The current situation on the ground is now reflecting those concerns.

Meanwhile, international lending agencies have also revised their forecasts for the country's economic performance. Both the Asian Development Bank (ADB) and the International Monetary Fund (IMF) have lowered their economic growth projections.

With the IMF lowering its growth forecast to 3.2 per cent, the lowest level in 38 years, economists see little indication of any significant improvement in revenue collection in the coming days. However, they remain hopeful that the situation will improve in the future.