Bangladesh has entered a form of debt trap and must confront the situation without delay, the head of the National Board of Revenue has warned.

Speaking at a seminar in Dhaka on Monday, NBR Chairman Md Abdur Rahman Khan said the country’s economic debates often overlook a central truth: domestic revenue remains far too low to reduce reliance on borrowing.

The seminar, held at the NEC Conference Room in Sher-e-Bangla Nagar, was organised by the General Economics Division of the Planning Commission with support from UNICEF Bangladesh.

Khan said key indicators suggest Bangladesh has moved onto a long-term debt path. “The sooner we accept this reality, the sooner we can move forward,” he told participants at the event on the state of the economy and progress on the Sustainable Development Goals.

He highlighted that while revenue collection has grown from Tk 168 crore in 1972 to Tk 3.78 lakh crore in the last financial year, the figure remains insufficient for an economy heavily dependent on external financing.

Khan expressed alarm over the falling tax-GDP ratio, which he said has slipped from above 10% to around 7% in recent years. Even Uganda, he noted, maintains a 12.5% ratio. The decline, he argued, reflects weaknesses in GDP estimation and large segments of economic activity remaining untaxed.

He also criticised extensive tax exemptions, particularly within the VAT system, saying decades of distortions have constrained domestic revenue mobilisation and deepened debt dependence.