Written by The Banking Post
Bangladesh’s revenue-to-GDP ratio dropped to 7.69 percent in FY2024-25, the lowest in five years, intensifying concern over the country’s fiscal health just months before the next IMF review.
Tax revenue slipped to 6.7 percent of GDP from 7.39 percent a year earlier, despite IMF conditions to raise the ratio by 0.5 percentage points annually. Overall revenue stood at Tk 4.34 trillion last fiscal year, growing by only 6 percent compared to 11 percent in FY24. Of this, NBR and non-NBR tax receipts rose just 2 percent to Tk 3.77 trillion, while non-tax revenue jumped 35 percent due to higher government fees and charges.
Officials fear the slowdown in tax mobilisation could complicate negotiations with the IMF, whose mission is due in October to assess Bangladesh’s progress before releasing the next tranche of its $4.7 billion loan package. For FY26, the IMF has set a Tk 400 billion additional revenue target through policy and administrative measures.
Economists warn that continued weakness in revenue collection poses long-term risks. “If such a situation continues, Bangladesh could fall into a dangerous debt trap,” said a senior economist, noting that the Annual Development Programme is now largely dependent on borrowed money.
He cautioned that the share of non-concessional loans is rising, while repayment grace periods are shrinking, making fiscal management more difficult. Unless domestic revenue mobilisation improves, he said, Bangladesh may face mounting macroeconomic pressures.
Experts also point out that past attempts at revenue administration reform have backfired instead of boosting collection, underlining the urgent need for effective measures to strengthen fiscal stability.
