Written by The Banking Post
The government is heading toward a sizeable revenue shortfall this fiscal year, with tax collection trends showing little sign of the acceleration needed to meet the ambitious target for FY26.
Provisional data from the National Board of Revenue show that the tax authority collected Tk 2.23 trillion in the July–January period, missing the seven-month target by Tk 601.14 billion.
To achieve the revised annual goal of Tk 5.03 trillion — raised midyear from Tk 4.99 trillion — the NBR would need to collect nearly 36 per cent more revenue in the remaining months. Yet overall revenue growth stood at around 13 per cent until January 2026.
Based on current trends, the shortfall could approach Tk 1.0 trillion by June 30 unless collections accelerate sharply.
Growth momentum lacking
Dr Fahmida Khatun, executive director of the Centre for Policy Dialogue, said the gap appears unavoidable.
“In the remaining four months, the new government may not be able to bring about radical economic improvements to mobilise substantially higher revenue,” she said, noting that business activity continues at a steady but unspectacular pace.
A senior revenue official also acknowledged that the projected 35.73 per cent annual growth target is unlikely to be met, citing sluggish development spending, weak private investment and slow job growth.
Ramadan, tobacco lift VAT
Revenue officials, however, point to signs of improvement in recent months, driven mainly by higher value-added tax (VAT) collection amid increased consumption.
They said election-related activity and Ramadan demand have boosted imports and spending. A significant contribution has come from the tobacco sector, where VAT collection has risen notably.
During July–January, VAT revenue grew by 16.45 per cent, income tax by 13.29 per cent and customs duty by 7.96 per cent.
Still, the average monthly collection until January stood at Tk 318 billion. To meet the revised target, the NBR must collect around Tk 560 billion per month from February through June — a steep jump from the current pace.
Hope pinned on stability
A senior tax official expressed cautious optimism that revenue mobilisation could improve following the formation of a stable elected government.
Investors, both domestic and foreign, who had largely taken a wait-and-see approach during the 18 months of interim administration, may now resume investment across sectors, he said.
For now, however, the revenue authority faces a daunting arithmetic: without a sharp turnaround in economic activity and tax compliance, the fiscal year is likely to close with a record shortfall.
