Finance Minister Amir Khosru Mahmud Chowdhury on Tuesday told Parliament that reduced purchasing power, business losses, lower industrial output and declining corporate profits were among 11 key reasons behind the country's revenue collection shortfall.
Responding to a starred question from reserved-seat lawmaker Nilufar Chowdhury Moni during the question-answer session in the Jatiya Sangsad, the minister said revenue collection up to April of the current fiscal year (FY2025-26) stood at Tk 326,928.16 crore against a target of Tk 431,461.27 crore, achieving 75.77 percent of the target.
He said the National Board of Revenue (NBR) had been assigned a revenue collection target of Tk 503,000 crore for FY2025-26. In the previous fiscal year, the target was Tk 463,500 crore, against which Tk 370,875.04 crore was collected.
The minister attributed the shortfall to a combination of economic and political factors, including a temporary administrative vacuum following political changes, disruptions in supply chains, high production costs and an overall slowdown in economic activity.
However, he noted that increased automation and stricter measures against tax evasion by the NBR in the latter part of the fiscal year were helping to narrow the gap.
Among the major reasons cited was the erosion of consumers' purchasing power due to prolonged high inflation, which remained close to double digits. The resulting increase in living costs significantly reduced disposable and taxable income among middle-income and salaried groups.
He also pointed to business losses stemming from disrupted industrial production, broken supply chains and stagnation in both wholesale and retail trade, all of which adversely affected corporate tax receipts.
The minister said many export-oriented and manufacturing industries, including the ready-made garments sector, were unable to operate at full capacity due to severe gas and electricity shortages.
Additionally, higher lending rates resulting from tighter monetary policy and the depreciation of the taka against the US dollar raised operating costs for businesses, reducing corporate profitability and, consequently, income tax revenue.
According to the minister, political instability, the absence of an elected government for part of FY2024-25, lower investment, sluggish import-export activities, reduced production and supply, and the closure of a significant number of VAT and supplementary duty-paying businesses also contributed to weaker revenue performance.
In FY2025-26, lower investment and imports, reduced production and supply, and the closure of many VAT-paying enterprises continued to affect revenue collection.
He further noted that imports of goods subject to 25 percent and 10 percent customs duties declined by 18 percent and 37 percent respectively compared to the previous year, reducing customs revenue.
Government decisions to lower duties and taxes on petroleum products to maintain stable fuel prices and the withdrawal of VAT at the import stage of liquefied natural gas (LNG) also affected revenue earnings.
Revenue collection was further reduced by the inclusion of new Harmonised System (HS) codes under an SRO related to capital machinery imports and a decline in imports of luxury vehicles compared to the previous year, he added.
The finance minister also referred to the July-August 2024 student-led mass uprising and the subsequent change in government, saying the events led to prolonged economic disruption across the country, weakened supply chains and caused wholesale and retail trade activities to slow significantly.
In response to another question from reserved-seat MP Selina Sultana, the minister said the government's outstanding debt through savings certificates stood at Tk 313,670.48 crore as of March this year.
By contrast, outstanding borrowing through treasury bills, treasury bonds and Bangladesh Government Investment Sukuk reached Tk 893,837.26 crore by May.
He said the outstanding debt from savings certificates increased by Tk 221.01 crore compared with March 2025, while outstanding borrowing through treasury bills, bonds and Sukuk rose by Tk 131,935.46 crore compared with May of the previous fiscal year.
Replying to a question from Satkhira-3 lawmaker Hafez Muhammad Robiul Bashar, the minister said Bangladesh's outstanding external debt stood at the equivalent of US$78.07 billion as of February this year.
Answering a question from NCP lawmaker Abdullah Al Amin, he said Bangladesh had received climate financing from three international funds — the Green Climate Fund, the Global Environment Facility and the Adaptation Fund.
Since the inception of these three funds, Bangladesh has received a total of US$484.411 million in climate financing, he added.