Staff Correspondent:

A record revenue shortfall worth nearly Tk 1.0 trillion is likely in the eventful outgoing fiscal, largely for sluggish private-sector investment, poor execution of development projects and banking-sector volatility.

Such shrinkage in resources of revenue is but a foregone conclusion as the country navigates a political upheaval-upset financial year following the July uprising that toppled the then-reigning autocratic government.

According to a provisional (unofficial) estimate until June 16, 2025, National Board of Revenue (NBR) officials expect Tk 3.70 trillion to be netted, against a revised target of Tk 4.63 trillion, by June 30 that marks the end of the financial year 2024-25.

Until April, taxmen had trailed far behind the pared-down target for the outgoing fiscal by Tk 714.76 billion or 38.02 per cent fundamentally for sluggish investment and ongoing macroeconomic challenges, according to NBR data.

A total of Tk 3.58 trillion in domestic revenues was mobilised in the first ten months of the outgoing fiscal year at a decelerating growth rate of 3.24 per cent over the corresponding period last year.

The tax-collection growth was above 10 per cent in the first nine months of the year.

In line with the estimated revenue mobilisation by June 30, an FE analysis quantifies this year’s tax-revenue growth around 2.49 per cent compared to that of previous year’s aggregate collection worth Tk 3.61 trillion.

The government has set Tk 4.99 trillion as tax-revenue-collection target for the next fiscal year.

Officials say the new target seems ambitious too as the NBR will have to achieve 35-percent growth if actual collection stands at Tk 3.70 trillion.

However, NBR chairman Abdur Rahman Khan sounds upbeat about his team’s ability t collect at least Tk 3.80 trillion through intensified efforts to ensure timely deposit of tax deducted at source (TDS).

Mr Khan said the board had already issued instructions to the field-level tax offices to gear up source-tax collection.

“We are trying with all-out efforts to reach close to the target amid several challenges,” he said, pointing out that the revenue-collection data are fully reconciled with the ibas++ of the accountant-general’s office without having scope to tamper with.

Focusing on the ongoing challenges in banking sector, Mr Khan said it is one of the largest contributors to corporate-income tax.

Also, poor implementation and downsized Annual Development Programme (ADP) affected domestic revenue mobilisation, he mentions.

A senior tax official says the banks are the large taxpayers that have been facing decline in profitability due to Bangladesh Bank’s guidelines on provisioning against loans.

On average, the NBR mobilizes around Tk 300 million per month as domestic taxes.

In FY24, the total revenue collection was Tk 3.61 trillion, against the target of Tk 4.10 trillion.

The shortfall in revenue collection was Tk 490 billion in FY 2024 preceded by Tk 380 billion in FY 23, the FE writer calculation based on the finance ministry documents.

Distinguished fellow of the Centre for Policy Dialogue (CPD) Professor Mustafizur Rahman says the revenue shortfall may hover around Tk 800 billion, a record high in the history.

Dr Rahman refers to the disruption to revenue mobilisation in the first quarter for mass uprising and the last quarter for NBR protests. “The revenue-to-GDP ratio is much lower than what taxpayers are paying as corruption is rampant to eat up government’s share,” the policy analyst says about the leaks.