Prime Minister's Adviser on Finance and Planning Dr Rashed Al Mahmud Titumir on Tuesday said the previous government had left the country's economy in a critical condition before leaving office, describing it as an economy that had been left in the intensive care unit (ICU).
He said the incumbent government had inherited a fragile economy, critically low revenue collection and a huge debt burden.
The government has undertaken coordinated initiatives to reform the revenue system, boost investment, create employment and restore economic momentum, he added.
Speaking to journalists at the Revenue Building in Agargaon in the capital, the adviser discussed the country's economic situation, revenue collection, banking sector, public debt, investment prospects and ongoing reform programmes.
"We inherited an economy that had been shattered across almost every sector. The banking sector alone will require around US$40 billion for recovery. In other words, they left the economy in the ICU and fled," he said.
Titumir identified low domestic revenue mobilisation and the mounting debt burden as two major challenges facing the economy.
The country's domestic resource mobilisation stands at only 6.67 percent of GDP, one of the lowest ratios in South Asia and globally, he said.
To address the situation, the government aims to raise the revenue-to-GDP ratio to 10 percent by 2030. It also plans to increase allocations to the education and health sectors to 5 percent of GDP.
"We are committed to fulfilling the promises we made to the people. The World Bank, the International Monetary Fund (IMF) and other multilateral development partners are aware that we have undertaken the reform programmes on our own initiative," he said.
Debt burden and revenue reforms
The adviser said the country's debt had increased significantly during the previous government's tenure, rising by 323 percent since 2009.
He identified three major categories of debt: government debt, government-guaranteed debt and private-sector debt.
According to preliminary estimates, government debt stood at US$90 billion as of June 2026.
He said the government had already spent US$4.49 billion on interest and principal repayments, adding that the repayment burden would increase further. Some estimates suggest that annual debt servicing could reach US$7.6 billion by 2030.
To tackle the challenges, the government has formed three separate task forces focusing on income tax, customs duties and value-added tax (VAT).
These initiatives have already contributed to an improvement in revenue collection, he said.
Revenue growth stood at 2.5 percent between fiscal years 2023-24 and 2024-25, but increased to 12.03 percent following the current government's initiatives, Titumir said.
Customs houses recorded the highest-ever duty collection towards the end of the last fiscal year, while efforts are underway to achieve similar progress in income tax collection.
He acknowledged that the ongoing crisis in the Middle East had created economic pressure, affecting revenue mobilisation, but said the government was working to achieve its targets despite the challenges.
On institutional reform, he said a proposal had been made to establish two separate divisions - Revenue Collection Division and Revenue Policy Division - following consultations with relevant stakeholders. The government hopes to implement the initiative soon.
Target to achieve 6.5pc economic growth
Responding to questions about revenue targets and economic growth, Titumir said the government had taken several measures to revive economic activities.
These include increasing public development expenditure, expanding credit flows to the private sector, strengthening remittance inflows and enhancing the purchasing power of low-income people.
He said the government had taken initiatives to change the fiscal year, as implementation of the Annual Development Programme (ADP) becomes difficult during the monsoon season.
The government also wants to move away from the practice of rushing to implement development projects in June, he added.
Emphasising the need to increase private-sector credit, he said easier access to finance was essential to keep the wheels of the economy moving.
Bangladesh Bank has already announced a package to support this objective, and one-fifth of the package has been disbursed, he said.
The adviser said a large number of people had fallen below the poverty line. A survey was underway to assess the implementation of the Family Card programme for poor and extremely poor households.
A Farmers' Card programme has also been initiated to support farmers.
The economy will move forward on the basis of four factors: investment, government expenditure, consumption and export earnings," he said.
He noted that remittance inflows were increasing and different indicators of the Purchasing Managers' Index (PMI) were pointing towards economic expansion.
Investor and entrepreneur confidence was also improving, he said, mentioning that China had started investment in its economic and industrial zone in Chittagong, while Japanese investors were showing interest in manufacturing and investment in Bangladesh.
Titumir said the government's vision was to transform Bangladesh into one of the world's leading manufacturing hubs and an important gateway for exports, placing special emphasis on private-sector investment.
Despite global challenges, including rising energy prices, the government expects the economy to achieve 6.5 percent growth in the current fiscal year, he said.
He added that the IMF and the World Bank had warned of further economic difficulties in the absence of reforms, while the current government was implementing reform programmes on its own initiative with support from multilateral development partners.
Government to ensure transparency in economic statistics
Responding to questions about transparency in revenue collection and the publication of economic statistics, Titumir said the government was not withholding information.
Revenue data on income tax, customs duties and VAT were being published regularly, and the government would further strengthen the publication of statistics under an open-data policy.
He said the reported default loan ratio in the banking sector, previously shown at 11 percent, had risen to 35.72 percent following forensic audits.
It was important to ensure the accuracy of information to present the actual economic situation, he added.
He said the government was also working to publish regular statistics on remittance inflows and revenue collection through the iBAS system, which provides daily information on government revenue and expenditure.
Forensic audit of GDP data
On the accuracy of GDP calculations and the tax-to-GDP ratio, the adviser said a forensic audit had been conducted to verify the country's GDP data.
Independent researchers carried out the audit using scientific methods, followed by a peer review involving leading economists from different schools of thought.
The report will be published on November 14, he said, adding that it would cover GDP calculations, the tax-to-GDP ratio and related issues.
"We have to ensure the accuracy of our data. Politics should not be mixed with this," he said.
Digitalisation to reduce harassment of taxpayers
On taxpayer harassment, VAT refunds and tax compliance, Titumir said reforms in the revenue administration were being undertaken to strengthen taxpayers' confidence.
He identified two priorities: ending unnecessary harassment of taxpayers and accelerating the digitalisation of the revenue system.
The government would review whether the risk-based audit system was functioning properly and assess the progress of VAT digitalisation, he said.
The activities of different wings of the revenue administration were also being monitored, while opinions were being collected from both large and small taxpayers to address their concerns.
Tax policy to support energy and productive industries
Asked about the possibility of imposing additional excise duty on energy and its potential impact on inflation, Titumir said technical-level discussions were currently underway with the IMF under a new programme.
The discussions would subsequently move to the mission and policy-making levels before being finalised and presented to the IMF Board, he said.
On tax exemptions and the tax-to-GDP ratio, he said the government's tax policy would be based on fairness, balancing increased revenue mobilisation with the tax burden on ordinary people.
"Our policy is to increase tax rates while supporting productive industries," he said.
He added that tax reductions had been introduced in selected sectors to encourage the production of essential goods and promote environmentally friendly industries, including electric vehicles and solar power.
Despite increases in international fuel prices, the government had not passed on the full extent of the price increases to consumers. A fair, consumption-based pricing policy was also being followed in the electricity sector, he said.
Capacity building of revenue officials
Titumir stressed the need to enhance the skills and professional capacity of revenue officials to keep pace with changes in the global economy.
He said officials needed specialised training in financial statement analysis, international business and transfer pricing.
Officials who achieve their assigned revenue targets would be evaluated and recognised in the future, while accountability of both government and political leadership would also be strengthened, he added.
He said building Bangladesh as a global manufacturing and trade hub would require skilled revenue professionals capable of understanding the accounting systems and transactions of multinational companies.
The government was working to provide revenue officials with necessary training and access to relevant databases, he said.
Titumir said the government was pursuing revenue reforms, investment promotion, expansion of production and social protection initiatives simultaneously to revive the economy and put it on a path of sustainable growth.
