Bangladesh’s revenue collection growth has accelerated to 12.03 percent following the formation of separate task forces for income tax, customs and value-added tax (VAT), Finance and Planning Adviser Professor Rashed Al Mahmud Titumir has said.
The growth marks a significant improvement from 2.5 percent in fiscal year 2024-25, which the adviser attributed to the government’s ongoing reforms to strengthen tax administration and domestic revenue mobilisation.
Speaking to reporters at the National Board of Revenue (NBR) headquarters on Tuesday, Titumir said the government aimed to raise the country’s revenue-to-GDP ratio from 6.67 percent to 10 percent by 2030.
He said customs houses had recorded the highest-ever duty collection towards the end of the last fiscal year, while income tax collection had also shown encouraging progress.
Despite the improvement, Bangladesh’s revenue mobilisation remains among the lowest in South Asia and globally, limiting the government’s ability to finance development and essential public services.
“Without increasing domestic revenue mobilisation, it will not be possible to raise allocations for critical social sectors, including education and health,” he said.
The government aims to increase public spending on education and health to 5 percent of GDP, making stronger revenue collection essential to achieving the target.
Reforms focus on widening tax base
Titumir said the government was prioritising institutional reforms, improved compliance and a fairer tax system rather than increasing tax rates.
The strategy aims to curb tax evasion and fraud, reduce unjustified tax exemptions and bring more individuals and businesses into the tax net.
As part of the NBR restructuring, a committee has recommended separating revenue collection from revenue policy through the creation of two distinct divisions. The committee has submitted its report, and the government expects to implement the recommendations soon.
The NBR has also introduced a risk-based VAT audit system to identify businesses for scrutiny using different risk indicators.
Meanwhile, the government is taking steps to settle around 29,000 pending revenue-related cases, involving substantial amounts of unpaid tax claims.
Banking crisis weighs on recovery
Addressing concerns over revenue shortfalls and negative VAT growth, Titumir said the government had inherited a severely weakened economy, with financial irregularities in the banking sector creating additional pressure on public finances.
He estimated that around US$40 billion would be required to recover the banking sector from the damage caused by large-scale financial irregularities.
Citing forensic audit findings, he said non-performing loans (NPLs) accounted for 35.72 percent of total loans, compared with the previously reported figure of around 11 percent.
The government is pursuing a broader economic recovery strategy focused on reviving investment, increasing public expenditure, stimulating consumption and boosting export earnings, he said.
Relevant agencies have been instructed to accelerate implementation of the Annual Development Programme (ADP), while Bangladesh Bank has announced a package to increase private-sector credit flows. Around one-fifth of the package has already been disbursed.
The government is also conducting surveys and verification to identify beneficiaries for its proposed Family Card programme, aimed at supporting people who have fallen below the poverty line.
Titumir said higher consumption among low-income households and increased remittance inflows would help stimulate domestic demand and economic activity.
NBR to publish revenue data regularly
Rejecting allegations that the NBR was withholding revenue collection figures, the adviser acknowledged shortcomings in its statistical management system.
Although daily collection figures are available through the government’s iBAS++ platform, reconciling data from different sources takes additional time, he explained.
The NBR expects to begin publishing revenue collection figures regularly from December.
On the possibility of imposing a fresh excise duty at the retail level of fuel sales, Titumir said discussions with the International Monetary Fund (IMF) over a new programme were continuing.
The issue remains at the technical level and will be placed before policymakers after the discussions are completed, he added.
Rising debt adds to fiscal pressure
The adviser also highlighted the growing debt burden, claiming that the country’s debt had increased by 300 percent over the past decade of the previous Awami League government.
The increase would stand at 323 percent if calculated from fiscal years 2006-07 or 2007-08, he said.
He put government expenditure on principal and interest payments at US$4.49 billion, warning that the figure could rise to US$7.6 billion by 2030 under some projections.
Titumir said financial irregularities had affected almost every sector of the economy, making banking-sector recovery and stronger institutional governance critical to restoring macroeconomic stability.