The National Board of Revenue (NBR) on Wednesday launched an automated online Value Added Tax (VAT) refund system, enabling refunds to be transferred directly to taxpayers’ bank accounts.
NBR Chairman Md Abdur Rahman Khan formally inaugurated the system by transferring Tk 45.35 lakh in VAT refunds to the bank accounts of three taxpayers under three Dhaka-based VAT commissionerates through the new electronic platform.
The NBR chairman said the authority has initially digitised the existing manual refund procedure to ensure continuity, with plans to simplify the process further through legal and regulatory changes if required.
“We have first taken the existing manual process and converted it into an electronic system. Once the system runs fully, we will review whether further simplification is needed. If necessary, we will amend the law and rules,” he said.
He said one of the key reforms would be setting clear, legally defined timelines for each stage of refund processing.
“The law or rules will clearly specify how many days or even hours each official can take to process an application. If that time is exceeded, the system will automatically trigger an alarm,” he added.
He said supervisory officials would be able to monitor pending applications through digital dashboards while the system would automatically issue show-cause notices to officials responsible for unjustified delays.
“If they fail to properly justify the delay, they will be held accountable. Otherwise, files remain stuck and taxpayers never get their money,” he said.
The NBR chairman said automation has been his top priority since assuming office ruling out any continuation of paper-based refunds.
“I have clearly said we will not give paper-based refunds. It took some time to build the system, but it has finally started today. Once it stabilises, it will be expanded,” he said, adding that income tax refunds would also be brought under a similar automated system after VAT refunds are fully operational.
Under the new system, taxpayers will need to provide their bank account details only once.
“The taxpayer will simply click the ‘refund request’ button. Everything else will be handled on our end,” Khan said adding that refunds will be paid directly from Bangladesh Bank.
He said the system is integrated with the government’s Integrated Budget and Accounting System (iBAS++), ensuring strong checks and balances in line with global standards.
“Those who collect revenue do not keep the accounts. The Controller General of Accounts maintains the accounts and Bangladesh Bank handles the money. This separation ensures transparency and prevents manipulation,” he said.
Rejecting the idea that refunds should be discouraged to protect revenue, he said refunds are a normal and essential part of a modern tax system.
“If we collect Tk 4 lakh crore in revenue and need to return Tk 4,000 crore as refunds through a transparent process, there is nothing wrong with that. Around the world, refunds are part of the system and we should follow that principle,” he said.
Referring to broader digital reforms, the NBR chairman also highlighted recent initiatives to boost online VAT return submissions.
He said many taxpayers faced difficulties submitting online returns because their previously filed paper returns had not been uploaded to the system by tax offices, leading to penalties and compliance problems.
To address this, the NBR has launched a crash programme allowing taxpayers to enter their past paper returns into the e-VAT system themselves, ensuring updated records and avoiding penalties.
The NBT chairman also said preparations are underway to make online VAT return submission mandatory through amendments to the VAT law, similar to the income tax system.
“Online systems save time, reduce travel, cut fuel use, ease traffic congestion and help the environment. If people can do everything from home, there is no reason to force them to visit offices,” he said.
Clarifying confusion over system names, he said the VAT platform has been rebranded as “e-VAT” to avoid confusion with iBAS++, adding that a new logo has also been introduced.
According to NBR data shared at the event, 115 refund applications have so far been submitted through the system amounting to Tk 124.49 crore. Of this, Tk 50 lakh is being disbursed on the first day.