The National Board of Revenue (NBR) has taken a move to expand the tax net, aiming to boost tax collection for increasing the tax-to-GDP ratio. As part of this initiative, the government has introduced new measures to bring more individuals and businesses under the tax umbrella, aiming to reduce dependency on indirect taxes and create a more equitable taxation system. The NBR has been working to increase the number of registered taxpayers by simplifying the tax filing process, enhancing digital infrastructure, and strengthening enforcement mechanisms. Currently, Bangladesh has around 9 million Taxpayer Identification Number (TIN) holders, but only about 3.5 million submit tax returns annually. The government aims to increase the number of active taxpayers to at least 5 million by the end of this fiscal year. To achieve this, NBR has made it mandatory for professionals such as doctors, engineers, lawyers, and other high-income groups to obtain TINs and file annual tax returns. NBR: International trade to go fully online under a single window next month Additionally, individuals owning cars, properties in upscale areas, or possessing investment portfolios beyond a certain threshold must now submit tax returns, even if they do not meet the taxable income limit. One of the key strategies for tax net expansion has been the adoption of digital solutions. The NBR has launched an online tax return filing system to simplify the process for taxpayers, eliminating the need for physical visits to tax offices. This system allows individuals and businesses to calculate, file, and pay their taxes online. The tax authorities have also been integrating their databases with other government agencies, such as the Bangladesh Road Transport Authority (BRTA), the Land Registry Office, and commercial banks, to identify potential taxpayers who have yet to register or file returns. This data-sharing initiative is expected to reduce tax evasion and ensure better compliance. Moreover, the introduction of the e-TDS (Electronic Tax Deduction at Source) system has improved tax collection from businesses by ensuring that tax deductions are reported in real-time. This system has already been implemented in major government and corporate entities, and it will soon be expanded to include smaller businesses and professional service providers. To widen the tax net, the NBR is also focusing on specific sectors that have traditionally been under-taxed. Monetary Policy: Private sector unhappy with lower credit flow target The real estate sector, for instance, is under increased scrutiny, with property transactions being closely monitored to assess whether buyers and sellers are properly reporting their incomes. Similarly, e-commerce and digital service providers, including content creators on platforms such as YouTube and Facebook, are now required to register for taxes. The government has introduced guidelines to ensure that income earned through digital platforms is taxed appropriately. The informal sector, which accounts for a significant portion of Bangladesh’s economy, is another area of focus. The NBR is working to bring small businesses, freelancers, and self-employed individuals into the formal tax system by offering tax incentives and awareness programs. A senior official of the NBR said that to encourage compliance, the NBR has strengthened its enforcement measures by increasing tax audits and penalties for non-compliance. Govt pushes drive to modernise NBR with new tech to augment revenue collection “The use of artificial intelligence (AI) and big data analytics is also being explored to detect discrepancies in tax filings,” he said. At the same time, the NBR has launched nationwide tax awareness campaigns to educate citizens on the importance of paying taxes. “Tax fairs, workshops, and media campaigns are being conducted to inform people about tax benefits, filing procedures, and the role of taxation in national development,” the NBR official added. Despite these efforts, the expansion of the tax net faces several challenges. A significant portion of Bangladesh’s economy operates in the informal sector, where record-keeping is minimal, making it difficult to assess taxable income. Additionally, tax evasion remains a concern, with many high-net worth individuals and businesses finding loopholes to avoid paying their fair share. To address these issues, the NBR official said, the government is considering further policy reforms, including lowering the tax burden on middle-income earners to encourage voluntary compliance. Additionally, the NBR plans to introduce a universal taxpayer database that will use AI-driven risk assessment tools to identify potential taxpayers more accurately. NBR to form committees to curb illegal tobacco trade, boost VAT collection The expansion of the tax net is crucial for Bangladesh’s economic growth and development. By increasing the number of taxpayers, the government can generate higher revenues to fund infrastructure projects, social services, and public welfare programs. Meanwhile, the government has given approval to set up nine new tax zones in different parts of the country, aiming to improve revenue collection. These offices are: Tax Zone-5 Chittagong; Tax Zone-6 Chittagong; Tax Zone-Cox's Bazar; Tax Zone-Jashore; Tax Zone-Kushtia; Tax Zone-Noakhali; Tax Zone-Dinajpur; Tax Zone-Faridpur; and Tax Zone-Narsingdi. The order issued in the public interest will come into effect immediately, according to a gazette notification. The Internal Revenue Department had given approval for the creation of a total of 28 new offices including 20 tax zones, 4 tax appeal zones, and 4 specialized offices in addition to the existing offices through administrative reform, reorganization and expansion of the Income Tax Division of the National Board of Revenue (NBR). NBR to fully operationalise bond automation this month to boost trade efficiency It also gave approval for the creation of 657 cadre posts permanently and a total of 3,943 non-cadre posts of various grades by adding/removing the manpower of 11 offices from the existing offices. Out of the newly created 28 offices, nine offices will be implemented in the second phase.

The interim government is pushing for further technological advancements at the National Board of Revenue (NBR), finding there is much ground that Bangladesh needs to make up within this specific field, even on its regional peers. It also provides the added advantage of widening the tax net, a perpetual target for tax authorities, without having to chase new taxpayers. The newest technologies are able to capture eligible payers under each category with minimum human intervention. The revenue collecting authority has taken a number of moves already to upgrade its systems, which would ultimately enhance tax collection. Finance Adviser Dr Salehuddin Ahmed, while visiting the NBR offices recently, said that revenue collection and revenue expenditure are almost satisfactory given the context of Bangladesh. “But we are still far behind regarding technological and systematic aspects,” he said. He also mentioned that the government is feeling the matter currently. “But we do not have much time (in our hand),” he added. The Finance Adviser mentioned that there is no other option to step into the modern era of revenue collection. “We have to use modern technology,” he added. In a move towards modernizing tax administration, the NBR has taken a comprehensive plan to integrate advanced technological solutions into its operations. This initiative aims to enhance efficiency, transparency, and taxpayer convenience, aligning with the government’s broader vision of a ‘Smart Bangladesh’. NBR to form committees to curb illegal tobacco trade, boost VAT collection The NBR’s technological inclusion strategy encompasses several key components designed to streamline processes and improve service delivery. Automated Tax Filing System: The introduction of an automated online tax filing system will enable taxpayers to submit returns electronically, reducing paperwork and processing time. By this system the NBR is hoping to get more than 14 lakhs of income tax return submission this time. E-Payment Platforms: Collaborations with mobile financial service providers, such as bKash, will facilitate electronic tax payments, making the process more accessible and user-friendly. Data Analytics and AI: The adoption of data analytics and artificial intelligence will assist in identifying tax evasion and improving compliance through predictive analysis. Digital Record Management: Transitioning to a digital record-keeping system will ensure secure storage and easy retrieval of tax records, enhancing operational efficiency. By the Alignment with National Digital Initiatives, the NBR is in line with Bangladesh’s ongoing efforts to bridge the digital divide and promote inclusive innovation. The government’s ‘Zero Digital Divide’ campaign, launched in 2022 with the establishment of the e-Quality Centre for Inclusive Innovation, aims to eradicate digital exclusion and promote the transfer of digital public infrastructure solutions to other developing countries. NBR to fully operationalise bond automation this month to boost trade efficiency The integration of mobile financial services into the tax payment system is expected to significantly enhance financial inclusion. Platforms like bKash have already revolutionized financial transactions in Bangladesh, providing services such as money transfers, bill payments, and mobile recharges. By enabling tax payments through such platforms, the NBR aims to make tax compliance more accessible, especially for individuals in remote areas. While the NBR’s technological inclusion initiative marks a significant step forward, it also presents challenges, including the need for robust cybersecurity measures, taxpayer education, and infrastructure development. Addressing digital inequality remains crucial, as disparities in access to technology can hinder the effectiveness of such initiatives. Talking to UNB, a senior official of the revenue collecting authority said that the NBR is committed to overcoming these challenges through capacity building, public awareness campaigns, and partnerships with stakeholders. “By embracing technological inclusion, the NBR aims to create a more efficient, transparent, and taxpayer-friendly environment, contributing to the nation’s economic growth.” NBR moves to simplify clearance system for smooth business The International Monetary Fund (IMF) has set a revised target for Bangladesh to increase its tax-GDP ratio by 0.6-percentage points for the current fiscal year. Under the government's commitment to the IMF, the tax-GDP ratio is expected to increase by 0.5 percentage points each fiscal year. Currently, the tax GDP ratio of the country is one of the lowest in the world, and it is yet to reach double digit. Bangladesh's tax-to-GDP ratio currently stands at just 7.9 percent—significantly lower than neighboring countries. India’s ratio is 12 percent, Nepal’s is 17.5 percent, Bhutan’s is 12.3 percent, and Pakistan’s is 7.5 percent.

The National Board of Revenue (NBR) is set to implement several initiatives aimed at reducing taxpayer hassles and enhancing revenue collection for the national exchequer. According to NBR sources, upcoming changes include the introduction of online corporate tax filing, an online tax return submission system for income tax lawyers, and a dedicated app for all taxpayers to file their income tax returns. Currently, the tax lawyers are submitting the income tax return for their clients manually. But the NBR has given importance to submitting income tax returns online to reduce the hassle of the taxpayers. But the change creates problems for the income tax lawyers. Any individual income taxpayer has to open an account in the NBR designated website to submit his/her income tax return through online. For this purpose, that individual needs to have a SIM card which is availed through biometric registration that causes trouble for tax lawyers to submit the income tax return in favour of their clients. According to an NBR high official, the revenue collecting authority has taken this matter seriously and working to solve the matter. “We are very much serious to resolve the problem for the tax lawyers and the taxpayers,” he said. Recently in a programme NBR chairman Md Abdur Rahman Khan said the revenue collecting authority is working to create a system where the income tax lawyers will be able to submit the income tax returns using their own ID and password. “By this the income tax lawyers will be able to continue their activities,” he said. The NBR has already issued an order to make online filing of income tax returns (e-Return) mandatory for government employees under the jurisdiction of income tax circles located in Dhaka North, Dhaka South, Gazipur and Narayanganj City Corporation, as well as sections of the private sector. Read: NBR strengthens security measures of Asycuda World system Online filing of income tax returns has been made mandatory for working officers/employees of all scheduled banks, all mobile telecom service providers and some multinational companies namely Unilever Bangladesh Limited, British American Tobacco Bangladesh Company Limited, Marico Bangladesh Limited, Berger Paints Bangladesh Limited, Bata Shoe Company (Bangladesh) Limited, Nestlé Bangladesh Plc. Online return filing system has been open for taxpayers since September 9 this year. From this system, taxpayers can pay taxes through internet banking, card payment (debit/credit card) and mobile banking and get the facility of downloading and printing copies of filed returns, receipts, income tax certificates, TIN certificates. Besides, anyone can download and print the e-Return filed for the previous year. A Biometric SIM registered with the national identity card of each taxpayer is required for successful registration in e-Return. Regarding the corporate tax return, various types of documents are required at present during tax return submission. The NBR chairman said that his organisation has already started the process to make it possible for the corporate taxpayers to submit their income tax returns following all procedures. Read more: NBR to gradually rationalise 60 tariff lines by 2026 “It will take some time, if we can not do that this year, we are cent percent sure that it will be done by next year where the corporate taxpayers will be able to submit their returns online,” he said. Finance Adviser Dr Salehuddin Ahmed while briefing reporters on Tuesday marking the 100th day of the interim government put empahsised on introducing online income tax return submission within the shortest possible time. The NBR is also planning to launch an app for income tax return from next year. “The taxpayers would be able to do this through the dedicated app,” Md Abdur Rahman Khan said. He said that after introducing all these matters with the running online system, the NBR would go for online income tax return submission for all taxpayers. “There may be some exceptions,” the NBR chairman said.

The National Board of Revenue (NBR) has initiated a plan to digitize its tax audit selection process, replacing the long-standing manual method, to eliminate human interference and restore taxpayer confidence. The move comes in response to ongoing complaints from taxpayers who claim the existing manual system exposes them to unnecessary harassment. NBR Chairman Md Abdur Rahman Khan confirmed the development: “We have begun working on digitizing the selection process to ensure it is objective and transparent.” He acknowledged NBR's "image crisis" concerning how tax audit files are selected. "Taxpayers often complain that the manual selection process is subjective, and this has damaged trust in the system," he said. "Our goal is to eliminate any confusion by fully automating the audit selection process, free from human intervention." In line with the NBR's ongoing transition to a digital system, the authority has temporarily suspended the selection of new tax files for audits. Following the formation of the interim government, NBR's member of taxes (tax audit, intelligence and investigation), Md Alamgir Hossain, issued a directive instructing all field-level tax offices to halt new audit selections until further notice. The decision aims to address the complexities faced by both taxpayers and tax officials under the existing manual process. NBR to focus on out-of-court settlement of tax disputes to boost revenue Bangladesh continues to grapple with one of the lowest tax-to-GDP ratios in the South Asian region—just 7.3%. In contrast, neighboring countries like India (12%), Nepal (17.5%), and Bhutan (12.3%) have significantly higher ratios. Moreover, only 5.2% of Bangladesh's population are registered as taxpayers, a stark contrast to India’s 23.08%. Currently, 67% of the government’s revenue comes from indirect taxes. The NBR has acknowledged the need to shift this dependency toward direct taxes. The NBR chairman has said they are working to broaden the tax net in a way that is more convenient for taxpayers, encouraging compliance while reducing the burden of indirect taxation. The implementation of the Income Tax Act 2023 has introduced new audit guidelines that have raised concerns about potential increased bureaucracy and costs for taxpayers. Under the guidelines, taxpayers may face multiple stages of interrogation, which some fear could open the door to underhand dealings. To combat these concerns, the NBR has been developing specialized software, known as the "Risk Management Engine," which is designed to bring greater transparency to the tax audit process. The software will link with other government agencies to gather data and select tax files for audit based on risk factors, helping to detect tax evasion more effectively. Read more: How to file your Tax Returns in Bangladesh

The Foreign Investor’s Chamber of Commerce and Industry (FICCI) has expressed some concerns about the proposed national budget for the fiscal year 2022-23 along with its probable implication for the business and foreign investments in Bangladesh. At a media briefing held in a city hotel on Wednesday, a potentially business-friendly budget will unravel the benefits unless some of the provisions such as Workers’ Profit Participation Fund (WPPF) are reversed. FICCI President and Chief Executive Officer (CEO) OF Standard Chartered Bank Naser Ezaz Bijoy presided over the event. Among others, Rupali Chowdhury, Advisor, FICCI Advisory committee and Managing Director, Berger Paints; Zaved Akhtar, Director, FICCI, Managing Director & CEO, Unilever Bangladesh Ltd.; Shehzad Munim, advisor, FICCI advisory panel and MD, British American Tobacco Bangladesh Co. Ltd; Deepal Abeywickrema, Director, FICCI & Chairman, FICCI Tariff, Taxation and Regulatory Affairs Committee and Managing Director, Nestle Bangladesh Ltd.; Sazzad Rahim Chowdhury, Coordinator- Tariff, Taxation and Regulatory Affairs Committee and CFO, Berger Paints Bangladesh Ltd were present in the event. The programme was hosted by Executive Director of FICCI.T. I. M. Nurul Kabir. The proposed Finance Bill incorporated a provision by which a company will have to pay tax on its contribution to the Workers’ Profit Participation Fund (WPPF), which will ultimately increase the income tax burden of the companies and similarly increase the effective tax rate, said the chamber body. It said contribution to WPPF has been proposed as inadmissible expenses based on the idea that it is an apportionment of profit from after-tax profit like a dividend, while the fact is, it is a statutory payment for the benefit of the employees, which is paid from pre-tax profit as per the law. Read: Budget FY23: Lower allocation for key mega projects worries FICCI FICCI has also recommended a few changes to the Conditional Reduction of the Corporate Tax Reduction by 2.5%. As per the Finance Bill 2022, certain types of listed companies that have issued more than 10% of their shares through IPO will be able to enjoy the reduced tax rate. FICCI proposes that this provision should be amended by clearly mentioning at least 10% shares of a listed company must be held by the public in order to avail of such a reduced rate. Conditional Reduction of the Corporate Tax Reduction by 2.5% also mentioned that all receipts must be collected through banking channels. FICCI proposes that this provision should be amended and the law should allow at least 50% of the proceeds to be collected through banking channels to avail such a reduced tax rate. From next year the ceiling can be gradually increased by 10%. On the same it says, all investments and expenses in excess of Tk. 12 lac must be paid through the banking channels. FICCI proposes that section 30 of the ITO, 1984 should be amended to remove the contradiction and NBR should allow at least 10% of the expenses of corporate to be paid through the non-banking channel to avail such a reduced tax rate.

Transparency International Bangladesh (TIB) has urged the government to withdraw the proposed budgetary provision of allowing launderers to legalise their undeclared money, saying such provision will discourage genuine taxpayers. It is immoral, discriminatory and conflicts with the existing laws to allow legalising laundered money from abroad without questioning, announced in the national budget for FY2022-23, the graft watchdog body said in a statement on Friday. Also read: Law bars asking questions about laundered money: Finance Minister But, according to the Money Laundering Prevention Act, 2012 and the relevant international law, money laundering is a serious crime and such provision will encourage money laundering and corruption in general, said TIB Executive Director Iftekharuzzaman. It is expected this provision will increase the foreign exchange flow and income tax revenue through the integration of money and assets earned abroad into the mainstream of the country's economy, he said. “But our past experience has shown that despite repeated opportunities to whiten black money in the country's economy, it has not yielded the expected results, nor has the government received the desired revenue.” It is impossible to bring back this laundered money or assets without a legal assistance agreement of our country with the authorities concerned in the country where the money is laundered, said Iftekharuzzaman. Besides, for those who are genuine taxpayers, the provision is blatantly discriminatory, as they pay at least three times the tax rate of 7 percent. This is discrimination and against the principles of the constitution, he added. In the proposed budget, the finance minister acknowledged the existing economic crises such as inflation, holding the value of the Taka against the dollar, increasing import costs and declining foreign exchange reserves, but could not provide effective strategies or guidelines to address them, he said. Also read: Budget FY23: Laundered money to be legalized by 7-15 pc tax The TIB executive director said although there is an expectation to expand social security programmes to reduce inflationary pressures on marginalised and low-income people, the proposed budget does not show much. “Rather, it has been shown to include government employees' pensions, interest on savings certificates, and loan waivers that were provided during Covid pandemic in order to maximize spending on the social security sector, which are not part of the Social Security programme."

The civil society representatives Wednesday demanded the direct inclusion of income taxpayers into the universal pension scheme (UPS), which is expected to be announced in the national budget for the fiscal year 2022-23. They also urged the government to take everyone's opinion into account to design an effective and sustainable scheme at a pre-budget seminar organised by COAST Foundation in Dhaka. Ahsanul Karim, assistant director at COAST Trust, said constitutionally Bangladesh is a welfare state but the approach of the UPS is somehow a commercial instead of being a rights-based one. The income taxpayers will have to be included directly into the UPS as they are key resource mobilisers to develop the country and have the right to get the benefit, he said. Barrister Shamim Haider MP said the proposed UPS is like an investment instrument that needs to be revised for shaping an institutional framework to serve everyone based on their economic status. "The change has to be made before submitting it to the cabinet." READ: Special allocation in budget required for SW coastal districts: Civil society leaders COAST Foundation Chairman Dr Tofail Ahmed said the UPS is now one of the options that can benefit the people who pay taxes directly and indirectly. He recommended bringing the "zakat fund" under a regulatory framework in mobilising substantial resources for UPS through paying tax incentives. Palli Karma Sahayak Foundation (PKSF) Chairman Dr Quazi Kholiquzzaman Ahmad said: "Poor people must be supported through the pension scheme. So, make the pension scheme people-focused within the quickest time," he said.

At least half the country’s TIN holders are likely to miss the November 30 deadline to submit their tax returns amid experts’ call to the National Board of Revenue (NBR) to go for a more bold and people-friendly tax collection campaign. Speaking on condition of anonymity a senior NBR official told UNB that the pace of manually submitted returns has been slow. He said he can’t disclose how many people submitted their returns manually until November 27, 2021. He, however, said some 33,653 taxpayers submitted their tax returns until Saturday (November 27) using the newly-launched eReturn system and a total of 71,500 taxpayers have registered digitally. Read: People’s interest in paying tax is growing in Bangladesh: Finance Minister The digital system ensured that there is no harassment, no bribe or no delay in issuing acknowledgement of tax certificates. A team of tax officials developed the system using the board's own resources. “The returns submission will take place on the last two days of November as usual like previous years and the number may not be less than the last year,” the official added. Some regular taxpayers complained that they did not get timely messages from NBR. Talking to UNB Abbas Uddin, a college teacher said, “I have been paying taxes for the past 11 years. I did not get any message from NBR.” When told of this complaint NBR member (tax policy) Md. Alamgir Hossain said that tax commissioner offices are organizing digital campaign in areas by sending SMS to the taxpayers Besides, NBR is using several media outlets to send out the information about tax return submissions, he said. He advised people to submit returns within the deadline otherwise they would have to explain the delay to the NBR through applications and pay extra fees for late submissions.

Transparency International Bangladesh (TIB), the corruption watchdog, has cautiously welcomed the government's decision to discard the provision of whitening black money in the proposed budget for the next fiscal (2021-22). Besides, the TIB is also drawing attention to the fact that this discriminatory and unconstitutional benefit should not be included in any other way out of respect to the honest taxpayers. Also read: Provision for black money whitening to continue: Finance Minister The TIB has expressed concern over the lack of a clear roadmap to ensure transparency and prevention of corruption in the overall budget implementation, not just the increase in allocations to critical sectors such as the health sector to control Covid. TIB Executive Director Dr Iftekharuzzaman in a statement on Thursday night said despite strong objections and protests from all quarters, Finance Minister AHM Mustafa Kamal allowed whitening black money in the outgoing budget. Also read: Black money: CPD for breaking vicious circle of illicit income “The decision of the finance minister not to renew the whitening of black money in the proposed budget for the next fiscal year can be taken as a realization of the government," he said. The TIB Executive Director said they want to believe that the authorities will not continue this unethical benefit under the pressure of vested interests again in future, while respecting the Prime Minister's dictum of 'zero tolerance against corruption'.

People need to change their mindset on paying taxes for sustaining the inclusive development of the country, Salman F Rahman, private industry and investment advisor to the prime minister, said.