The National Board of Revenue (NBR) has set a target to raise the country’s revenue-to-GDP ratio to 10.7 percent by the fiscal year (FY) 2028-29 to strengthen domestic resource mobilisation and sustain economic development, according to the government’s Medium-Term Macroeconomic Policy Statement (2026-27 to 2028-29), says BSS report.
The policy statement identifies increasing the revenue-to-GDP ratio as a key prerequisite for maintaining development momentum and addressing structural weaknesses in the economy, noting that Bangladesh’s revenue-to-GDP ratio remains among the lowest among comparable economies.
According to the document, the overall revenue-to-GDP ratio stood at 8.3 percent in FY 2023-24, before declining to 8.0 percent in FY 2024-25 due to structural weaknesses in tax administration, tax exemptions on essential commodities aimed at containing inflation, and lower import-related revenue amid global economic uncertainties.
The government projects the ratio to increase to 10.2 percent in FY 2026-27, 10.5 percent in FY 2027-28, and 10.7 percent in FY 2028-29.
NBR tax revenue, which accounted for 6.7 percent of GDP in FY 2024-25, is projected to rise to 8.8 percent in FY 2026-27, 9.1 percent in FY 2027-28, and 9.3 percent in FY 2028-29.
The policy statement notes that total revenue figures include foreign grants, while non-NBR tax revenue is expected to remain between 0.3 percent and 0.4 percent of GDP during the period.
In his budget speech for FY 2026-27, Finance and Planning Minister Amir Khosru Mahmud Chowdhury said the government’s medium-term objective is to raise the country’s tax-to-GDP ratio to 10 percent, with a long-term target of 15 percent by 2035.
He said the government aims to establish a fair, technology-based, universal and predictable tax system while creating a stronger economic cycle driven by investment, production, employment, consumption and improved revenue collection.
To achieve the targets, the NBR plans to implement wide-ranging reforms, including the full digitisation of tax administration, strengthening transparency and accountability to encourage voluntary compliance, broadening the tax base through increased economic activity, and establishing a more predictable revenue framework.
The policy statement says higher domestic revenue mobilisation will reduce dependence on deficit financing and bank borrowing, complement the government’s contractionary monetary policy in controlling inflation, and strengthen the economy’s resilience against domestic and external shocks.