NBR to Raise VAT Rates on 43 Goods and Services

Bangladesh's tax compliance remains weak, with 65% of registered taxpayers failing to file returns despite deadline extensions. By February 16, only 39.86 lakh taxpayers, including 13,066 companies, filed returns out of 1.14 crore TIN holders.

Hili Land Port reported a revenue shortfall of Tk 43.93 crore in July-December FY 2024-25, collecting Tk 318.76 crore against a Tk 362.69 crore target. While July and October exceeded targets, deficits in other months contributed to the decline. The NBR set an annual target of Tk 740 crore.

In H1 FY25, import-revenue collection from Bangladesh's top ten tax-contributing items dropped by 10%, amounting to Tk 121.65 billion compared to Tk 135.50 billion in H1 FY24. Key contributors like high-speed diesel (-23%), sugar (-28%), and palm oil (-31%) experienced significant declines.

Bangladesh's revenue collection declined by 0.98% year-on-year to Tk 156,442 crore in July-December FY25, marking a rare negative growth. The revenue shortfall reached Tk 58,000 crore, with imports dropping from $90 billion in 2021 to $70 billion in 2023, reducing tariff income. Inflation, a sluggish development budget, and slower manufacturing further strained revenue growth.

In the past five months, Bangladesh has faced a revenue deficit of 420 billion Taka, as reported by the Chief Advisor's Press Secretary, Shafiqul Alam. He emphasized the need to increase the tax-to-GDP ratio for the benefit of the general population.

Bangladesh's National Board of Revenue (NBR) has raised value-added tax (VAT) and supplementary duty (SD) on a wide range of goods and services despite concerns about inflation and its impact on economic activities.