As Bangladesh prepares for the 2026-27 national budget, one message is becoming increasingly clear: the government is searching aggressively for new sources of revenue. Faced with IMF reform conditions, widening fiscal deficits, and mounting development expenditures, policymakers appear ready to expand the tax net far beyond traditional taxpayers. While increasing revenue collection is necessary for economic stability, the emerging strategy raises an uncomfortable question are ordinary citizens once again being asked to bear the heaviest burden?
The proposed measures reveal the scale of the government's revenue challenge. The National Board of Revenue (NBR) is reportedly targeting Tk 600,000 crore in revenue collection next fiscal year, despite the fact that actual revenue growth in recent years has remained between 12 and 15 percent. With a revenue deficit of nearly Tk 98,000 crore already recorded in the first nine months of the current fiscal year, the pressure to comply with IMF prescriptions and finance public spending has become intense.
To bridge this gap, the government plans to expand taxation into sectors that have historically remained informal or lightly regulated. Freelancers, e-commerce operators, rural traders, motorcycle owners, and battery-powered auto-rickshaw drivers are all expected to come under greater scrutiny. Proposals for advance income tax on motorcycles and auto-rickshaws may appear modest on paper, but for many middle- and lower-income families these costs represent another blow in an already inflationary economy.
Particularly concerning is the plan to impose "token VAT" on small rural businesses and make Business Identification Numbers (BINs) mandatory for trade licenses and business bank accounts. Bringing informal businesses into the formal economy is a reasonable long-term objective. Bangladesh's tax-GDP ratio remains one of the lowest in South Asia, and widening the tax base is essential for sustainable public finance. However, the process must be fair, gradual, and sensitive to economic realities.
The danger lies in focusing excessively on small traders and ordinary vehicle owners while larger tax evasion, illicit financial flows, and weak corporate compliance continue to undermine state revenue. Millions of cottage and micro businesses operate with minimal profit margins. Burdening them with complicated compliance systems, even simplified ones, risks discouraging entrepreneurship and deepening rural hardship.
At the same time, the government deserves credit for increasing the tax-free income threshold to Tk 3.75 lakh, which offers some relief to lower-middle-income earners. Yet this alone may not offset the broader impact of rising indirect taxes and regulatory costs.
Bangladesh undoubtedly needs stronger revenue collection to sustain development ambitions. But fiscal reform cannot succeed if citizens perceive it as a one-sided exercise where the poor and middle class are taxed more while structural inefficiencies remain untouched. The upcoming budget must therefore strike a delicate balance between revenue generation and social justice. Economic stability is important, but public trust is equally vital.
