Political turmoil, low investment slowed revenue collection: Finance minister
Khosru says supply chain disruptions, low industrial output and reduced imports contributed to revenue shortfall
Finance Minister Amir Khosru Mahmud Chowdhury has told parliament that political instability, the absence of an elected government, low investment, weak import-export activities and disruptions in production and supply chains significantly affected revenue collection in fiscal years 2024-25 and 2025-26.
Speaking during a question-answer session in the Jatiya Sangsad today (9 June), the minister identified 11 factors behind the revenue shortfall, including declining purchasing power, reduced industrial production, business losses and lower corporate profits.
Responding to a question from reserved-seat MP Nilufar Chowdhury Moni, Khosru said revenue collection until April in FY26 stood at Tk326,928.16 crore against a target of Tk431,461.27 crore, achieving 75.77% of the target.
He said the National Board of Revenue (NBR) had been assigned a revenue collection target of Tk503,000 crore for FY26.
In FY25, revenue collection reached Tk370,875.04 crore against a target of Tk463,500 crore.
According to the finance minister, temporary disruptions following the political transition, supply chain bottlenecks, rising production costs and slower overall economic activity were the key reasons behind the lower-than-expected revenue collection.
However, he said increased automation and stronger anti-tax evasion measures by the NBR were helping narrow the revenue gap toward the end of FY26.
Khosru said prolonged high inflation, which remained close to double digits, had sharply increased living costs and reduced the taxable surplus income of middle-income groups and salaried employees.
He also said disruptions in industrial production, broken supply chains and sluggish wholesale and retail trade had reduced business income, negatively affecting corporate tax collection.
The minister said gas and electricity shortages prevented many manufacturing industries, including the readymade garment sector, from operating at full capacity.
Higher lending rates and depreciation of the taka against the US dollar also increased operating costs for businesses, leading to lower profits for large corporate entities - one of the major sources of income tax revenue, he added.
Khosru further said imports of goods subject to 25% and 10% customs duties declined by 18% and 37% respectively in FY26 compared with the previous fiscal year, contributing to lower revenue collection.
The minister said government measures aimed at keeping fuel prices stable - including reductions in duties and taxes on petroleum products and the withdrawal of VAT on imported liquefied natural gas - also affected revenue earnings.
Revenue receipts were further impacted by tax concessions on capital machinery imports and a decline in luxury vehicle imports, he added.
Khosru also said the economic disruption following the July-August 2024 student-led mass uprising and the subsequent change in government caused prolonged stagnation in economic activities, disrupted supply chains and weakened business operations across the country, ultimately reducing corporate earnings and tax payments.
