IMF inquires how NBR plans to meet its 45% higher revenue target for FY27

Highlights:

• IMF backs framework for new Bangladesh programme
• Reforms to be implemented in phases
• IMF praises progress on reforms and tax collection
• Further talks due in September or October

The International Monetary Fund (IMF) has asked the National Board of Revenue (NBR) how it plans to achieve its Tk6.04 lakh crore revenue target for the fiscal 2026-27, which is about 45% higher than the FY26 collection.

The IMF mission also sought details of the tax and fiscal measures introduced in the latest national budget during a meeting with senior NBR officials at the revenue authority's headquarters in Dhaka today (13 July), according to sources who attended the meeting.

On the same day, the IMF delegation led by Ivo Krznar, the mission chief for Bangladesh and Hong Kong, also met Finance Minister Amir Khosru Mahmud Chowdhury.

The IMF representatives arrived on Sunday for a five-day fact-finding mission to assess the feasibility of a fresh loan package worth nearly $4.5 billion proposed by the government.

The finance minister told journalists after the meeting that the IMF delegation had expressed appreciation for the government's financial reforms and its political commitment.

He said the government had clarified the principles on which its new programme with the IMF would be based, and that the IMF had fully agreed with the proposed framework.

"Major changes cannot be made overnight, and the IMF has agreed with this approach," the finance minister said, adding that reforms would be introduced in phases while taking into account the country's economic conditions and maintaining the continuity of the reform programme.

An NBR senior official, who attended the meeting and spoke to The Business Standard on condition of anonymity, said, "The representatives wanted to know how the revenue target for the new fiscal year would be achieved and what plans have been put in place to meet that goal.

"They also wanted to know what changes had been made in the latest budget. We briefed them on those changes."

He further said, "The mission also sought detailed explanations about the 0.20% tax imposed under the Finance Bill on the value of goods purchased by retailers, which will be collected at the dealer level."

NBR officials also told the IMF that a newly elected political government could not immediately withdraw all expenditure-related measures or tax incentives.

The official said, "The delegation were also informed that tax exemptions granted to various sectors are subject to sunset clauses. These cannot be withdrawn before their expiry, and a political government cannot simply abolish all exemptions whenever it wishes."

IMF 'satisfied' with revenue collection progress

According to the finance ministry, the IMF delegation expressed satisfaction with the growth in revenue collection during the first four months since the BNP-led government assumed office.

"The IMF delegation expressed satisfaction with the visible progress made during the current government's first four months in financial sector reforms, the development of the stock and capital markets, and revenue collection," Finance Minister Amir Khosru said.

The ministry said the IMF described the rise in tax collection over the four-month period as a significant achievement. It also held positive discussions with the government on proposals to further increase Bangladesh's tax-to-GDP ratio while maintaining the current momentum in revenue collection.

Khosru reiterated that reforms would be implemented gradually, based on priorities and in line with the country's overall economic conditions, adding that the IMF had endorsed this phased approach.

He said the IMF had also shown respect for the responsibilities and public welfare obligations of an elected government, adding that economic decisions would continue to be made with the public's interests in mind.

On subsidies, Khosru said no detailed discussions had yet been held on specific conditions or measures. The talks focused primarily on establishing the framework for a new IMF programme, while detailed issues would be discussed at a later stage.

He said the discussions were part of an ongoing process, with the next round of talks expected during the World Bank's annual meetings in September or October.

The finance minister added that the IMF was satisfied with the current government's reform-oriented performance and that a new programme would be finalised on that basis.