The National Board of Revenue (NBR) has unveiled an ambitious plan to boost revenue collection in the coming years, aiming for a significant increase in domestic revenue.
For the 2025-26 fiscal year, the NBR has set a target of Tk 564,000 crore, marking a Tk 74,000 crore rise compared to the current fiscal year’s target of Tk 490,000 crore. This move is part of the government’s broader strategy to raise revenue, with projections for the following years also showing considerable growth. The revenue target for the 2026-27 fiscal year is set at Tk 649,000 crore, and for 2027-28, it will reach Tk 746,000 crore. In total, the government plans to increase domestic revenue by Tk 2.5 lakh crore over the next two years.
As Bangladesh seeks to balance its expenditure and revenue, the question remains whether these ambitious targets can be realistically met and sustained without placing undue strain on the population
These ambitious projections were finalized during a meeting of the Budget Management Committee (BMC) on January 2, which was chaired by Md. Abdur Rahman Khan, Secretary of the Internal Resources Division, and Chairman of the NBR. As the revenue target rises, so too is the expected size of the national budget for the upcoming fiscal year. Preliminary estimates suggest that the budget for fiscal year 2025-26 could reach Tk 850,000 crore. However, there is growing concern that, as in previous years, the proposed expenditure and revenue targets may not be fully met.
While the push to increase the revenue target is supported by some, experts are urging for a deeper analysis of why revenue targets have often fallen short in the past. Economists are particularly advocating for a shift from the traditional approach of revenue collection to a demand-based strategy that aligns better with the realities of the economy.
Dr. Khandaker Golam Moazzem, Research Director at the Center for Policy Dialogue (CPD), highlighted the need for fiscal discipline. “The economy is at a stage where expenditure needs to be reduced while focusing on increasing revenue collection. However, the need for revenue should be aligned with balanced expenditure,” Moazzem said. He added that much of the current budget’s funds are being directed toward repaying domestic and foreign debts. He emphasized that while setting revenue targets, policymakers must consider the structure of public expenditure and avoid putting additional pressure on the common people.
The revenue target for the current fiscal year 2024-25 is Tk 490,000 crore. To meet the higher budget size for the upcoming fiscal year, the NBR is aiming for a 15 percent increase in revenue collection, which amounts to Tk 73,618 crore more than the previous fiscal year. However, the 2023-24 fiscal year saw a revenue shortfall of about Tk 28,000 crore, with the target of Tk 410,000 crore falling short by 7 percent, collecting only Tk 382,562 crore.
Former National Board of Revenue (NBR) Chairman Mohammad Abdul Majid has voiced his support for raising revenue collection targets, even in the face of recurring revenue deficits. Speaking on the issue, Majid stated, “There will be accountability for why the revenue could not be generated. The budget cannot be reduced simply because the revenue collection target was not met. The target should be increased even more.”
Majid’s remarks came as the government seeks to set ambitious revenue goals for the upcoming fiscal years, despite the challenges faced in meeting previous targets. According to the former NBR Chairman, while it is crucial to set higher targets, the expenditure budget should also align with the size of the economy. He emphasized that the focus should be on investing in quality expenditures that can stimulate economic growth.
“We should not increase the budget through unjust practices or irregularities as done in the past. Instead, the increase should be driven by quality expenditure,” Majid noted. He stressed that with a larger budget, there must be a corresponding effort to boost revenue. Furthermore, he called for greater accountability to ensure that targets are met and any shortfall is effectively addressed.
However, not everyone agrees with the approach of increasing taxes to boost revenue. Business leaders have expressed concerns that an increase in the tax burden could harm the economy. Abdul Haque, former director of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and current president of the Bangladesh Reconditioned Vehicles Importers and Dealers Association, warned that such measures could stifle business activity.
“The economic situation is dire. At this time, steps like increasing revenue collection and raising taxes could worsen the situation. This would reduce the purchasing power of the people,” Haque explained. He cautioned that while it may be easy for the government to impose higher taxes, the real impact would be felt if businesses are unable to pay these taxes, leading to further economic distress. Instead, Haque suggested that the government focus on cutting unnecessary expenditures and finding other ways to address revenue gaps.
As the government prepares for the next fiscal year, the debate over how to balance revenue generation and economic stability continues to unfold. While some advocate for higher targets and accountability, others warn that without a careful approach, increased taxes could burden both businesses and the general public.
