Govt revenue collection falls Tk10,000cr short in July-Aug amid unrest

The government's revenue collection significantly declined during the first two months, July and August, of the current fiscal year (FY25), primarily due to the country's unstable situation, according to sources from the National Board of Revenue (NBR).

Sources said that, according to the finance ministry's Integrated Budget and Accounting System (iBAS++), the NBR collected about Tk41,000 crore in the first two months of this fiscal year, missing the target by around Tk10,000 crore.

This collection is about 7% less than what was collected during the same period last year, based on finance ministry data. However, compared to the NBR's own data from last year, the shortfall is more than 11%.

"There was widespread unrest across the country for most of the first two months of the fiscal year, which negatively affected overall economic activities, including business, leading to impacted revenue collection," an NBR income tax official told The Business Standard.

The official also noted that the iBAS++ calculations for July and August are not yet fully complete. "Once the entire calculation is finalised, the collection figure may increase slightly. Additionally, there is usually some slowdown in revenue collection at the beginning of the year," he added.

Towfiqul Islam Khan, a senior research fellow of the Center for Policy Dialogue, told TBS, "Economic activity was disrupted due to the unstable situation in the first two months, which is one of the key reasons behind the low revenue collection.

"Furthermore, the decline in imports during the period, the government's transition phase, has negatively affected revenue collection." 

In the first two months of FY25, import-related letter of credit (LC) openings and settlements dropped by about 13%, according to Bangladesh Bank data.

The data showed that import LCs worth $10.03 billion were opened in July-August, nearly $1.5 billion less than the same period last year.

The NBR has set a revenue collection target of Tk4.80 lakh crore for FY25, with a target of over Tk51,000 crore for the first two months.

Towfiqul Islam Khan believes that the current economic situation indicates the government is unlikely to meet the revenue target for the ongoing financial year. As a result, the target may need to be revised downward by the end of the year.

However, Salehuddin Ahamed, finance adviser of the Interim Government, recently said that the current revenue target will not be reduced.

There has been a significant gap between the data from the NBR and the finance ministry in recent years. For example, in FY24, the NBR reported a gap of about Tk19,000 crore compared to the finance ministry's figures.

Now, the NBR has started using data from the finance ministry, a change that the CPD has long supported.

Towfiqul Islam Khan called this a positive step, as it will provide more accurate revenue data and help with government spending decisions. However, he stressed the need for the NBR to reform its processes to improve revenue collection and ensure transparency and participation.