Tk 580b revenue shortfall in first half of FY25

Revenue collection has fallen short by around Tk 580 billion compared to the target in the first six months (July-December) of the current fiscal year 2024-25, while the figure is less by Tk 100 billion in comparison to the collection in the previous fiscal’s corresponding period. 

According to the National Board of Revenue (NBR), a total of Tk 1,560 billion was collected in revenue during the July-December period, down by 6 per cent or Tk 100 billion from Tk 1,656 billion collected in the previous fiscal’s first half. 

The NBR officials attributed the shortfall to disruptions in business and trade due to the student-people movement in July and August and subsequent unrest in the political sphere.

The current trend of revenue collection indicates that the NBR is likely to fail in achieving the annual target in the current fiscal year. In the first half, the revenue board managed to collect only one-third, or 32.5 per cent, of the Tk 4,800 billion revenue target. 

The deficit in duty and VAT collection against the target during the July-December period amounted to Tk 577.24 billion. The revenue collection target for the July-December period was Tk 2,140 billion, while actual collection stood at Tk 1,562.76 billion.

None of the three major revenue sources – import duties, VAT, and income tax – met their six-month targets, with the income tax collection experiencing the largest shortfall. For income tax, there was a collection target of Tk 766.7 billion, while the actual collection stood at only Tk 521.62 billion. 

In the import sector, Tk 498 billion was collected against the target of Tk 619.52 billion during the same period. VAT collection reached Tk 551.77 billion, falling short of the Tk 663.17 billion target.

Mohammad Abdul Majid, former NBR chairman and a member of the advisory committee on revenue sector reform, cited political unrest as the reason behind the poor revenue collection. 

While talking to Prothom Alo, he said political unrest during the opening two months of the current fiscal year disrupted business and trade. This, in turn, affected import duty and VAT collection, while income tax collection also remained low.