NBR's rush to meet revenue gap

FE Team | Published: May 05, 2026 21:47:37

Failure to meet revenue targets set in the ambitious budgets has been a familiar pattern in Bangladesh. The revenue authority is obviously in a race against time to make up for the huge revenue shortfall created over the past nine months and meet the gap by the final quarter of the current fiscal year (FY2025-26). Faced with the challenge, the tax regulator, the National Board of Revenue (NBR), is learnt to have undertaken an aggressive and targeted drive to meet the record revenue shortfall of around Tk 980 billion.
Notably, implementation of the Annual Development Programme (ADP) remains an important exercise on the part of the government to help enhance economic growth as well as generate revenue. Effective and timely ADP implementation drives up revenue earning. But a slow rate of project implementation during the first three quarters of any fiscal year is more of a tradition in Bangladesh. So, to make up for the sloth, the rate of project execution is expedited in the last quarter of a fiscal year. As expected, the tax authority is now faced with the familiar uphill battle of meeting the revenue gap by way of, for instance, revenue income from tax deduction at source (TDS) from government payments made to contractors and suppliers of goods and services. In such a situation, the NBR's extensive drive to recoup revenue shortfall is evidently going to be an ambitious as well as challenging exercise. To fulfil the target, the NBR would be required to collect over Tk 2.60 trillion in this final quarter to minimize the gap as much as possible. Despite 11.5 per cent growth, slow ADP spending created the deficit. The VAT exemptions, subsidies and other economic pressures also played their part.
Worse still, the fiscal constraints and the persisting uncertainties globally mainly due to the wars, especially in the energy-rich Middle East and their negative impact on the energy supply chain was brought to bear on the government through scaling down of its development spending. As a result, the government spending dropped markedly (by about 20 per cent) in March this fiscal (FY26) compared to what it was in the same month of fiscal year (2024-25). What it boils down to is low monthly utilisation rate of ADP resources.
According a report in the May 4 issue of this paper, the key technical division of the Bangladesh Planning Commission, the General Economic Division (GED), indicated that the usual spur of spending in the final quarter of this fiscal would be rather subdued due to below-average ADP implementation. Small wonder that some analysts think it is highly unrealistic to expect that the NBR will be able to collect nearly half of an entire year's target in just three months. To overcome the challenge, the tax authority is learnt to have formed a task force comprising three senior officials from the income tax, customs and VAT wings of the NBR who would help intensify revenue collection efforts during the April-June quarter of the current fiscal. As reported, the said task force, among other responsibilities, would increase monitoring of the tax officials' performance in the field. A digital dash board has been installed to monitor revenue collection activities across field offices in real time. At the same time, the task force will review income tax and VAT returns, recover arrears and expedite dispute resolution and so on.
Hopefully, the task force would do its bit efficiently to realise NBR's last-ditch effort to narrow down revenue shortfall as much as possible. But without reforming the existing revenue regime, the yearly revenue shortfall is going to remain a recurring phenomenon. In that case, the present political government should fast-track the work of the panel it formed to review the ordinance proclaimed during the interim government with the objective of reforming the revenue regime.