NBR Revenue Shortfall Tops Tk 50,000 Crore in Four Months as VAT Collection Falls

In the first four months of the current fiscal year alone, the National Board of Revenue (NBR) has fallen more than Tk 50,000 crore short of its revenue collection target. According to the NBR's preliminary figures, the target for July to October of the 2026-27 fiscal year was about Tk 178,000 crore, against which less than Tk 128,000 crore was collected.

In the first three months of the fiscal year, July to September, the revenue shortfall was about Tk 43,000 crore. The shortfall grew further in the next month to cross Tk 50,000 crore, creating fresh concern over whether the government will achieve its revenue income target.

On one side, dependence on borrowing to meet budget spending is rising; on the other, the NBR is falling behind in revenue collection. As a result, the government's income-and-expenditure arithmetic is becoming increasingly difficult, the report's information shows.

NBR officials say expected momentum in economic activity is missing, the target was set ambitiously, and some policy problems are preventing the desired growth in revenue collection.

Even though the shortfall is large, revenue collection has grown compared with the same period of the previous fiscal year. But the growth rate is below 6 percent, whereas revenue growth in the first four months of last fiscal year was more than 16 percent.

According to NBR data, among the three main revenue sectors, value added tax (VAT) collection is in the worst condition. In the first four months of this fiscal year, income tax and import-stage tax collection grew by about 14 percent, but VAT collection saw no growth at all. Instead, collection in this sector fell by about 6 percent compared with the same period of the previous fiscal year.

In the current fiscal year's budget, the government set a revenue collection target of Tk 604,000 crore. That target is 45 percent higher than the actual collection of the previous fiscal year.

The report said such a large target for revenue growth in a single fiscal year has never been set before in the country's history. In the latest 2025-26 fiscal year, revenue collection grew by 12 percent over the previous year, and the average growth in past years was about 15 percent. As a result, concerned people had questioned, since the budget announcement, whether this fiscal year's target could be achieved.

Dr Zahid Hussain, former lead economist at the World Bank's Dhaka office, said he had said earlier that the revenue target given in the budget was not realistic, and that is now being reflected. In his words, the government has to borrow more from the banking sector to carry out development work because of this.

Expressing further concern, Dr Zahid Hussain said the government cannot do much development work at this moment, so revenue collection may fall further in the coming days and there is not much prospect of it rising.

He also said increasing revenue collection is one of the conditions of the new loan agreement the government is about to make with the International Monetary Fund (IMF). He therefore thinks the government must pay more attention to this matter.