Originally posted in Industry Insider on 6 August 2025
NBR faces steep 35% revenue growth target for FY26
Economists raise concerns over achievability and potential pressure on taxpayers
The National Board of Revenue (NBR) has been tasked with raising nearly 35 per cent more tax revenue in fiscal year 2025–26 than the previous year, despite having posted one of the weakest collections in recent history.
The NBR’s revenue collection target for FY26 stands at Tk 4.99 trillion, up from Tk 3.70 trillion collected in FY25, according to a Financial Express analysis based on official data.
The tax authority’s three main wings—income tax, VAT, and customs—are facing substantial increases in their respective targets: 42.63 per cent, 30.49 per cent, and 29 per cent, respectively.
The most significant pressure falls on the income tax wing, which must generate 43 per cent more than last year’s collection, despite an overall revenue growth of just 2.23 per cent in FY25. The final month of FY25 saw a 37.6 per cent shortfall from the monthly target, with June recording a 19 per cent year-on-year decline.
Economists warn that the aggressive targets may prompt excessive pressure on businesses and individuals. Dr Fahmida Khatun, Executive Director of the Centre for Policy Dialogue (CPD), described the targets as “unachievable under the current economic conditions,” citing slow investment, political instability, and eroded business profitability.
She also pointed to external risks, including recently imposed US tariffs on Bangladeshi exports, which may hurt the competitiveness of small and medium-sized enterprises.
“Businesses are still recovering. Without significant institutional reform, raising taxes from existing payers risks increasing harassment,” said Dr Khatun. She added that the long-promised separation of tax policy and administration remains stalled, with a key reform ordinance missing its July 31 deadline.
Responding to concerns over fiscal strain, Finance Adviser Dr Salehuddin Ahmed said the FY26 budget was framed conservatively, with reduced spending plans to reflect likely revenue constraints. Government expenditure is expected to drop to 12.7 per cent of GDP, and the development budget is the lowest in four years.
