Dhaka: Finance Minister Amir Khosru Mahmud Chowdhury addressed Parliament on Tuesday, highlighting multiple reasons for the country’s revenue collection shortfall. He identified reduced purchasing power, business losses, lower industrial output, and declining corporate profits among 11 critical factors.
According to United News of Bangladesh, during a question-answer session in the Jatiya Sangsad, responding to reserved-seat lawmaker Nilufar Chowdhury Moni, the minister revealed that revenue collection up to April of the fiscal year 2025-26 was Tk 326,928.16 crore. This figure represented 75.77 percent of the target, set at Tk 431,461.27 crore.
The National Board of Revenue (NBR) has been set a collection target of Tk 503,000 crore for FY2025-26. The previous fiscal year’s target was Tk 463,500 crore, with actual collections amounting to Tk 370,875.04 crore. The minister attributed the revenue shortfall to a mix of economic and political issues, including an administrative vacuum due to political changes, supply chain disruptions, high production costs, and an overall economic slowdown.
Increased automation and stricter anti-tax evasion measures by the NBR were noted as efforts to mitigate the shortfall. High inflation eroded purchasing power, reducing disposable income among middle-income and salaried groups. Disrupted industrial production, broken supply chains, and stagnant trade adversely affected corporate tax receipts.
Export-oriented and manufacturing industries, notably the ready-made garments sector, faced operational challenges due to severe gas and electricity shortages. Tighter monetary policy and the depreciation of the taka increased business operating costs, impacting corporate profitability and income tax revenue.
The minister pointed to political instability, including the absence of an elected government for part of FY2024-25, lower investment, and sluggish import-export activities as factors contributing to weaker revenue performance. These issues persisted into FY2025-26, alongside lower investment and imports, reduced production, and the closure of VAT-paying enterprises.
A decline in imports of goods subject to high customs duties led to reduced customs revenue. Additionally, government decisions to lower duties and taxes on petroleum products and withdraw VAT on the import of liquefied natural gas (LNG) affected revenue earnings.
The introduction of new Harmonised System (HS) codes and a decrease in luxury vehicle imports further impacted revenue. The finance minister also cited the July-August 2024 student-led mass uprising and subsequent government change as causes of economic disruption, weakened supply chains, and slowed trade activities.
In response to other questions, the minister reported the government’s outstanding debt through savings certificates and treasury instruments, as well as Bangladesh’s outstanding external debt and climate financing received from international funds.