Bangladesh’s tax authority struggles with revenue shortfalls in 2025 economic slump
Bangladesh’s tax authority faced a difficult year in 2025 as economic slowdowns cut into revenue growth. The National Board of Revenue (NBR) repeatedly missed collection targets, with imports shrinking and domestic demand staying weak. Despite efforts to widen the tax base, compliance remained stubbornly low across most sectors.
From July to November 2025, the NBR gathered around Tk 1.49 lakh crore—falling short by roughly Tk 24,000 crore. The shortfall came as businesses struggled, reducing tax payments at both import and domestic levels. Even with income tax returns rising, only about four million taxpayers filed, far below the number of registered holders.
Protests by NBR officials in mid-2025 worsened the situation. After the government introduced the Revenue Policy and Revenue Management Ordinance, 2025, staff walked out for nearly two months. Operations stalled, delaying collections and adding to the financial strain. The VAT system also showed gaps. While 644,000 businesses were registered, this covered just a fraction of active enterprises. Many small traders and service providers stayed outside the formal tax net. Meanwhile, the government pushed ahead with an ambitious target of Tk 5.54 lakh crore for FY2025-26, even as economic pressures persisted. By the end of 2025, over 10.2 million people held Taxpayer Identification Numbers. Yet turning registrations into actual payments remained a hurdle. Income tax grew but still lagged, held back by weak enforcement and slower business activity.
The NBR’s struggles in 2025 exposed risks in Bangladesh’s tax system. Heavy reliance on a narrow taxpayer base and import duties left revenues vulnerable to economic downturns. With compliance still low and targets rising, the coming year will test the authority’s ability to close the gap.
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