Prolonged protests at National Board of Revenue (NBR) against the breakdown of the state revenue authority resulted in work abstention, 27 employees being suspended and missing the revenue collection target for the concluding fiscal year FY25.
According to the provisional data, NBR revenue collection fell from its revised target Tk461,000 crore, set by the interim government for FY25. The final collection stood at Tk370,000 crore, falling short by Tk92,626 crore.
Data also revealed that NBR has been failing to meet its revenue collection targets for nine consecutive years now. It has not been able to meet its target in any year since FY2015-16.
The NBR's major shortfall in revenue targets is attributed to the NBR's institutional weaknesses and the government's excessive targets, as well as various ongoing movements in the last fiscal year, including last year's July movement, the NBR's reform movement this year, and too many bank holidays, according to economists and stakeholders.
Zahid Hussain, former lead economist at the World Bank Dhaka Office, told Dhaka Tribune: “The NBR has always had a deficit in revenue collection compared to the revenue target. One of the reasons for this is the government's over-ambitious target setting. There is also institutional weakness.”
“However, in the case of last year, some other reasons were added to it. For example, the July movement at the beginning of the year and the movement of NBR officials towards the end of the year had a major impact. In addition, our imports were much lower last year, due to which revenue collection from this sector also decreased,” he explained.
Asked how the government can meet this deficit in revenue collection in the budget, he said: “What happened earlier was that the revenue shortfall was less compared to the expenditure budget, as a result of which the budget deficit did not increase significantly. However, now the revenue shortfall is increasing compared to expenditure. To meet this deficit, the government might have to increase borrowing.”
Masrur Reaz, chairman and chief executive officer of Policy Exchange Bangladesh, told earlier that the revenue collection target wasn’t set systematically or based on proper research into the economy.
Moreover, the July uprising and a number of movements, protests, and blockades in the following months also impacted the country’s supply chains, he added, saying that even NBR officials were protesting for about two months.
However, the government announced the national budget for FY26, which also gave an ambitious target to NBR to collect Tk499,000 crore. This is 35% higher than what was actually collected last fiscal year, also 4% higher than the previous target.
Revenue shortfall
The ousted government initially aimed to collect Tk480,000 crore in FY25, but the interim government ultimately slashed the target by Tk18,500 crore to Tk461,500 crore for FY25.
According to the provisional data, revenue collection drastically fell short. In FY25, NBR's overall collections were Tk370,874 crore. Falling short of its revised target by Tk92,626 crore.
However, the NBR failed to achieve its tax collection target despite registering a 2.23% growth in collections in FY25, against a growth of 15% in FY24.
On the other hand, revenue collection in June—the final month of the fiscal year—stood at approximately Tk43,092 crore, which is Tk9,955 crore less than the Tk53,047 crore collected in June FY24.
Traditionally, June yields the highest monthly revenue, but this year's figure marks a sharp decline.
“Usually in June, the last month of the fiscal year, the highest revenue is collected, but in FY25, revenue collection drastically falls short in July because of the unstable panic situation in NBR,” Zahid Hussain said.
Regarding this shortfall, officials at NBR attribute this drop largely to the movement by its employees protesting the government's move to dissolve the board and split it into two separate wings—the Revenue Policy Division and Revenue Administration Division—through a presidential ordinance issued on May 12.
In early June, NBR officials began their protests.
The protest, which lasted until June 29, reportedly disrupted operations and slowed economic activities, including imports and exports.
Panic spreading at NBR
The interim government believes that, due to the protest by the NBR Reform Unity Council, the country lost a large chunk of revenue collection in FY25.
Disciplinary actions followed. After 29 June (called off the move for complete shutdown), NBR officials and employees in various positions were dismissed due to the agitation at the NBR last month.
To date, a total of 27 officials and employees have been suspended in the last few days. More to join the list.
So far, three members and one commissioner have been sent on compulsory retirement after the withdrawal of the movement.
According to NBR sources, all of them were involved in the agitation that took place in the NBR last month. Some even led it. This agitation was held under the banner of the NBR Reform Unity Council.
In addition, the ACC has started an investigation against 16 officials, including 2 members of the NBR. Most of them were involved in the movement.
Seeing anonymity, an NBR official told Dhaka Tribune: “The ongoing action at NBR is causing intense panic among officials and employees.May fear suspensions, dismissals, discharges, transfers, ACC investigations, lawsuits, arrests, etc making them increasingly uneasy.”
“Will we have a job tomorrow? Has the ACC come? Has a lawsuit been filed against us? Such questions grip every moment,” the official added.
World Bank, IMF to assist NBR reforms
The IMF and World Bank proposed to split NBR into two separate wings due to the continuous failure to achieve revenue targets. Even two consecutive installments were stuck. However, after the government announced the separation of the NBR, the IMF sanctioned the next two installments.
On June 29, Chris Papageorgiou, chief of the Development Macroeconomics Division in the IMF's Research Department, confirmed that the International Monetary Fund (IMF) and the World Bank have officially begun a joint initiative aimed at enhancing revenue mobilization and separating the NBR into distinct policy and administrative bodies.
“This is starting now. We are in discussions with the authorities,” Papageorgiou said, describing the “Joint Revenue Mobilization Initiative.”
He explained that the two global financial institutions are coordinating forces across “four primary pillars” to drive revenue growth.
The IMF official also said: “These pillars encompass both 'policy measures' and 'structural measures like the separation of policy and administration' within the NBR. Addressing concerns about the ambitious Tk240,000 crore revenue target set for Bangladesh by December 2026, particularly amid ongoing societal challenges, Papageorgiou acknowledged the ‘difficult environment.’”
However, he said the target was designed to be “ambitious but achievable.”