Revenue needs to increase by three folds to meet IMF conditions

The National Board of Revenue (NBR) reduced the value-added tax (VAT) on soybean oil imports from 10% to 5% effective until December 15, as stated in a circular on November 20. This measure aims to stabilize edible oil prices in the local market. Previously, on October 17, the NBR had granted a 15% tax exemption on local production and a 5% exemption on the supply of refined and unrefined soybean and palm oil.

Bangladesh is losing $355 million in tax annually due to corporate profit shifting and tax abuses by wealthy individuals, according to the State of Tax Justice 2024 report published on November 19. Of the total, $335.9 million is lost through profit shifting by multinational corporations, which moved $1.3 billion out of the country—equivalent to 0.1% of Bangladesh's $460 billion economy.

The Large Taxpayers Unit (LTU) recorded a 12.14% rise in revenue collection during July-September of FY2024-25 compared to the same period in FY24, reaching Tk 63.01 billion. This growth contrasts with a 6.07% decline in overall tax collection by the National Board of Revenue (NBR). Strong monitoring and proactive measures by the LTU, such as one-on-one meetings with 100 corporate taxpayers, ensured compliance.

The National Board of Revenue (NBR) is facing a significant revenue shortfall, with a Tk 307.67 billion (Tk 30,767 crore) deficit by October, missing its July-October target of Tk 1321.12 billion (Tk 1,32,112 crore) for FY24-25. Income tax showed the largest gap, collecting Tk 324.89 billion (Tk 32,489 crore) against a Tk 452.42 billion (Tk 45,242 crore) target. Import duty and VAT also fell short by Tk 69.12 billion (Tk 6,912 crore) and Tk 111.02 billion (Tk 11,102 crore), respectively.

The National Board of Revenue (NBR) has removed all import duties on onions, effective immediately from November 6, 2024, to reduce import costs and stabilize prices, which have reached up to Tk 150 per kilogram in Dhaka. This zero-duty policy will be in effect until January 15, 2025. Previously, the NBR had retained a 5 percent import tariff after cutting a regulatory duty in September.