Huge gap in revenue collection reality against huge target

Staff Correspondent

Plans are being submitted for NBR reforms to increase revenue, projects are increasing, the list of progress on paper is getting longer—but in reality, revenue flow is completely stagnant. Even though technology-based initiatives are being added one after another, the pace of revenue generation has not increased. No matter how lofty the rhetoric of the structure and policy is, the picture on the ground says—the results are not coming.

The data for the first four months of the current fiscal year 2025-26 has made this clear. The NBR is in a deficit of Tk 17,219 crore, or 12.60 percent, compared to the target. Tk 1,19,478 crore has been collected—the target was Tk 1,36,697 crore. Although there was growth compared to the previous year, it could not cover the failure to meet the target.

E-return, e-TIN, e-audit, IVAS, e-invoice—these technology-based projects have been talked about for years. On paper, they are called the ‘foundation of future revenue administration’, but in reality, most of the initiatives are stuck in the middle; their impact on the ground is limited. Technology is being added, platforms are growing—but the core problems of tax collection remain the same. As a result, the slowdown in revenue flow has not stopped.

There is a deficit in all three major sectors—VAT, income tax and customs. VAT collected 46,878 crores, while the target was 48,146 crores. The deficit in income tax is even bigger—9,194 crores, which is 19.54 percent. The deficit in customs stands at 6,756 crores or 16.27 percent.

According to economists, the problem is not a lack of technology, but rather a slowdown in the economy and the inherent weaknesses of the tax system.

According to economist M. Helal Ahmed Joni, the unstable economy, slow business, and low flow of imports and exports have all put direct pressure on revenue collection.

Customs duty collection is declining, VAT leakage is increasing, and the trend of sales concealment is not decreasing. The tax net is narrow, taxes are not reaching the informal sector. There is no escape from this cycle due to the lack of efficiency in tax administration.

Added to this is the internal instability within the NBR. Transfers, disciplinary measures and internal pressure have disrupted the focus of officials – and this has had an impact on field-level collection, commented former bureaucrat Firoz Mia.

According to the latest data from the NBR, there are deficits in every sector, and every indicator is sending a message that the gap between the target and reality is not narrowing.

Meanwhile, top NBR officials are hopeful that collections will increase by the end of the year. Their main hopes are to expand the tax net, prevent evasion, and collect arrears. But the real challenge of meeting the target is tough—Tk 3,83,522 crore has to be collected in the remaining eight months.

According to former chairman Dr. Abdul Majid, the root of the problem lies in setting unreasonable goals.

In his words, the problem starts with the excessive targets given beyond the NBR’s capacity. If the targets are increased without considering reality, it is not possible to bring about the desired speed in revenue flow even through reforms and technology.