Bangladesh has significant potential for mobilising revenue collection, as highlighted by a recent official assessment on revenue buoyancy, a measure reflecting how tax revenues respond to economic growth. Revenue buoyancy, the responsiveness of revenues to gross domestic product (GDP), is a critical metric for gauging the performance of a revenue system and the forecast for revenue growth. A buoyancy coefficient greater than one indicates that tax revenues grow faster than GDP, while a coefficient less than one suggests slower growth. Using real GDP and real revenue growth rates from FY12 to FY23, the analysis found an average revenue buoyancy of 0.90, which falls below one. NBR accelerates efforts to clear revenue case backlog This lower score highlights the scope for enhancing revenue mobilisation in Bangladesh, as per the Finance Ministry document. The official assessment also noted that the effective tax rate can serve as another measure of revenue performance. For example, the effective rate of VAT can be derived by comparing it with consumption data from the real sector. An analysis shows that the effective VAT rate has risen in recent years, reaching 7.1 percent in FY23. However, this remains well below the standard of 15 percent VAT rate applicable to most products in Bangladesh. Bangladesh’s revenue collection still lags behind comparable economies. In 2022, the general government revenue–GDP ratio was 23.1 percent in Nepal, 19.8 percent in India, and 14.8 percent in Lao PDR, while Bangladesh’s ratio stood at only 8.9 percent. There is broad consensus that a positive correlation exists between economic development levels and revenue collection. To achieve the country’s development objectives, the Finance Ministry has called for major reforms to enhance the effectiveness, efficiency, transparency, and fairness of the tax administration system. The document also emphasises revisiting tax exemptions to ensure that these benefits support the broader economy and do not disproportionately favour wealthier individuals at the expense of low-income groups, thus undermining the redistributive aims of fiscal policy. There is also significant room for improvement in tax return submissions; in FY22, only 33.3 percent of TIN holders filed tax returns, a figure that is markedly higher in similar countries. The Finance Ministry has outlined several modern reform strategies to strengthen revenue mobilisation. These include expanding the tax base, adopting a modern property tax system, introducing green and carbon taxes, simplifying tax collection, fully automating tax filing and payment processes, and minimizing direct interactions between tax collectors and taxpayers. Other strategies include making audits more selective, productive, and criteria-based, as well as separating tax policymaking from tax collection. The government has made progress in this direction, with an increased share of income tax and VAT in total revenue. However, there is still a need to reduce dependency on indirect taxes and focus more on direct taxes. The actual share of direct taxes in total revenue was 32.3 percent in FY21, which increased slightly to 32.7 percent in FY23. To sustain revenue growth, the government will continue efforts to broaden the tax base, shift reliance from trade taxes to direct taxes, and further accelerate the growth of direct taxes in the coming years.    

Aiming to significantly boost revenue collection from domestic sources, the National Board of Revenue (NBR) is adopting a three-pronged approach. These are: digital transformation, expansion of tax net, and enhancing administrative capacity. The core idea is to make tax payments easy and transparent to improve taxpayer services which in turn will help NBR to collect more revenue, according to an official document. According to the Medium Term Macroeconomic Policy Statement (2023-24 to 2025-26) of the Finance Division of Finance Ministry, the government has taken some Major reform measures to materialise the move. The VAT & Supplementary Duty Act 2012 has been implemented in July 2019. With the implementation of the new act, the collection of VAT and supplementary duty is expected to receive a significant boost in the medium term. After the initial hiccup and the shortfall due to the outbreak of COVID-19, revenue collection accelerated in FY22. The government has enacted the new Customs Act, which replaced the Customs Act 1969. International best practices in customs, including that of the World Customs Organization (WCO), the revised KYOTO Convention and the WTO Trade Facilitation Agreement have been incorporated here. NBR will go after house and flat owners for not filing returns; NBR Chairman The law aims to harmonise and simplify customs processes to facilitate the collection of custom duties. The new Income Tax Act is also expected to create an enabling environment for taxpayers, streamline income tax assessment and collection, and facilitate domestic and foreign investment. To implement the new VAT law, the NBR undertook the ‘VAT Online Project (VoP)’ which was in operation since 2013 and concluded in June 2021. Under the VOP, the official document said that the three important automation measures have been completed. First, the Online VAT Registration began in March 2017. Again, the central registration system has been in force since July 2019. The NBR has introduced online return submission in July 2019. The digital filing system has been introduced in the form of online submission of VAT returns. The NBR has rolled out the electronic payment (e-payment) of customs duties in 2017, income tax in 2012 and VAT in 2020. Income tax can be paid through MFS (mobile financial services) as well. To facilitate real-time deposit of government money to the national exchequer, the government has launched the Automated Invoice Portal. This Automated Challan (also known as A-Challan) will act as the receipt window of the government. The payment of income tax has already been brought under the A-Challan system on a pilot basis. The NBR now plans to expand its use for payment of VAT and customs duties. The A-Challan will ensure the timely deposit of money including the prevention of fake return submission and revenue evasion.Moreover, the discrepancy between the amount of revenue collected by the NBR and the accounts given by the Accounting Offices will be eliminated. The Medium Term Macroeconomic Policy Statement (2023-24 to 2025-26) said that individual taxpayers can now submit their tax returns online. NBR extends deadline for filing companies’ tax returns to April 30 The NBR has successfully launched eTDS Environment for easy and hassle-free processing of income tax at the source. With the introduction of this system, taxpayers’ time, cost and visits have been reduced to almost zero. Taxpayers can now submit fourteen reports in the eTDS environment. To stop evasion in VAT and enhance VAT collection, the government has introduced Electronic Fiscal Devices (EFD) with a sales data controller mechanism. The government has already installed 9270 EFD/SDC (Sales Data Controller) machines. NBR has selected 24 sectors, including residential hotels, bakeries and fast foods, decorators and caterers, sweet shops etc. for this purpose. To broaden the coverage, the government has decided to outsource the installation of EFD/ SDC machines with a target of 60,000 EFD/ SDC in the first phase and 3,00,000 in five years, if the first phase brings good results. Besides, to prevent tax evasion and to bring transparency in VAT record keeping, the government has made the use of NBR-prescribed VAT software mandatory in VAT-registered industries with annual turnovers of Tk 5 crore or above. The NBR has made provisions to enable internet-based companies, such as Google, Facebook, Microsoft etc. to pay their VAT on online sales. This allows these companies to pay their VAT through their authorised VAT agents without opening their office in Bangladesh. The NBR plans to operationalise the risk management system to ensure that no more than 10 percent of the import consignments are subject to physical examination. To that end, the NBR has established a Central Risk Management Unit/Commissionerate for Customs. To streamline the bonded warehousing system, reduce its misuse and make it transparent, the government has taken a project that aims to automate the bond management system by June 2023. Meanwhile, the licensing module has started operation and other modules will become operational soon. Bangladesh Customs will soon be conducting a Time Release Study in the major custom houses to take stock of the actual time taken in the release of imported consignments. The objective of the TRS will be to identify bottlenecks in customs clearance and to take measures to reduce clearance time. The NBR strives to expand the number of taxpayers and has made the return submission mandatory for all TIN-holders with a few exceptions. Other reform efforts by the NBR included – i) implementation and activation of Online National Single Window, Post Clearance Audit, Advance Ruling, Authorised Economic Operator, and thereby increasing dynamism in international trade; ii) full implementation of online income tax return submission under SGMP project; iii) implementation of “Individual Source Tax Deduction Monitoring Zone” to strengthen income tax deduction monitoring; iv) expansion of the e-Payment system in income tax; v) activation of transfer pricing and anti-money laundering activities; and vi) strengthening ICT infrastructure construction and automation activities. Administrative expansion of the income tax department is underway, the Medium Term Macroeconomic Policy Statement added. Introduction of the Document Verification System (DVS) has brought financial discipline and positively contributed to boosting tax collection both in income tax and VAT by increasing transparency. NBR collects nearly Tk 2 lakh crore in 7 months, growth over 15%

Commerce Minister Tipu Munshi on Sunday emphasized widening the net of VAT and tax collection in general in keeping with the development of the country. He said this while speaking at a seminar titled 'Role of VAT in National Development: Present and Future' held at Bangabandhu International Conference Center (BICC) on Sunday, the first day of the two-day revenue conference. Chairman of National Board of Revenue (NBR) Abu Hena Md. Rahmatul Muneem chaired the seminar. Addressing the officials of NBR, the commerce minister said, “We are talking about coordination in some matters from the Ministry of Commerce. It's the best. We want you to do that with our combined efforts.” In 2026 there will be pressure on customs duty. It is expected that after graduation from LDC list, the NBR would face several challenges. The commerce minister has advised looking at the scope of VAT and income tax. Its net must be widened, Munshi said. "Now if you go to collect income tax, you will become disliked by people. No one wants to pay tax; you have to take a positive role there too," he pointed out. Also read: NBR extends income tax returns submission date to Dec 31 He also said, “We need a Smart Bangladesh. Ending digital and moving towards smart. To reach the goal, your actions must be smart. That's why I heard about different processes, and different types of automation coming. I am very optimistic; your work will take us forward in building Smart Bangladesh.” The NBR is organising a two-day revenue conference on February 5 and 6 to increase public awareness and develop a revenue-friendly mindset. Simultaneously, the new NBR premises were inaugurated at Agargaon on February 5. Prime Minister Sheikh Hasina inaugurated the revenue conference and the new building.  

The government has projected an increase in revenue collection in the coming days as the country’s economy has started recovering gradually from the shock of COVID-19 pandemic.According to an official document, the revenue collection for 2023-24 fiscal has been projected Tk 4999.7 billion while it will be Tk 4362,4 billion for the 2022-23 fiscal.In the running fiscal of 2021-22 the revenue collection has been fixed at Tk 3890 billion.The document said that on-going and the proposed reform plans undertaken by the government are expected to boost the domestic revenue reaching the target in the medium term.The government has set revenue target of Tk 3890 billion for running 2021-22 fiscal, which is 10.7 per cent higher than that of the revised target in fiscal 2020-21.The document mentioned that revenue collection needs to grow at a rate of 21.0 per cent (on average) from the actual collection in fiscal 2020-21 for achieving the revenue target in fiscal 2021-22. Also read: NBR goes all-out to boost tax revenue for better economic growthRevenue mobilization is expected to be strengthened in the medium term when the economy would recover from the COVID-19 pandemic and the NBR reform programs are implemented fully.The total target of the revenue collection for the running 2021-22 fiscal is Tk 3890 billion. Of the total amount tax revenue will contribute Tk 3460 billion. The share for the National Board of Revenue (NBR) is Tk 3300 billion.The government projects to collect Tk 1049.5 billion from Income and profit taxes, Tk 379.1 billion from customs duties and Tk 1822.10 billion from VAT and supplementary duties in fiscal 2021-22.

The government has taken several measures to provide seamless services to the taxpayers through automation and digitalisation of Income Tax, VAT and Customs Departments under the National Board Revenue (NBR), according to an official document. The government believes that internal sources will be the main field of revenue collection for uninterrupted economic progress amid global economic stagnation due to the COVID-19 pandemic and its aftermath. According to the document E-payment services have been initiated through establishment of necessary interfaces with the Bangladesh Bank for online payment of taxes. Read: NBR directs big push to reach the revenue target for current fiscal Now, the taxpayers can pay their returns from home at their convenience through their own bank accounts without physical presence at the premises of Bangladesh Bank or the state-run Sonali Bank. As in every year, the major portion of the total budget expenditure will be mobilised from internal resources that will be collected by the NBR. The target revenue collection for the running fiscal has been set Tk 330,078 crore. Read Experts frustrated at NBR's role as calls for specific taxes on tobacco go unheeded VAT wing will contribute the lion share with Tk 127,745 crore and target for Income Tax and Tax on Profit has been set at Tk 104, 952 crore. The revenue collection from import duty will be Tk 37, 907 crore, Tk 54,465 crore from from supplementary duty, Tk 56 crore from export duty, Tk 3825 crore from excise duty while Tk 1050 crore from other taxes and other duties. The target of internal revenue is set based on budget size. There are mainly two sources of revenues: NBR revenue, non-NBR revenue. Read NBR faces uphill task in achieving VAT collection target Almost 85 per cent of the total revenues is collected by the NBR. Although the main purpose of the NBR is to collect revenue, various types of tax exemption, reduction in rate or tax benefits have been given with respect to income tax, VAT and customs duty for the sake of industrialisation, employment generation, increase of business scope, protection of domestic industries, attraction of foreign investment and establishment of a just and equitable society. The document stated that In spite of the fact that tax-GDP ratio is comparatively low, the revenue income has sustained growth every year. However, it said that the apprehension remains that the economy will not return to normalcy in the coming financial year. Read NBR moves to speed up revenue collection The government has formulated our fiscal policy taking the COVID-19 pandemic, recession and instability of world trade and commerce into account. “In consideration of the impact of COVID-19 pandemic in business, in this budget the government put emphasis on protection of public health, employment creation and speeding up the pace of our economy along with revenue collection.” Terming internal sources will be the main field of revenue collection for uninterrupted economic progress amid global economic stagnation, the document mentioned that Keeping the prevailing circumstances in mind, the government wants to bring the taxpayers under the tax net through reforms in tax systems, expansion of tax scope and motivating the taxpayers and all e-TIN holders to submit their annual tax returns voluntarily. Read NBR to prioritize local industries in 2021-22 budget, says its chairman The Income Tax Departments have already taken steps for return submission of non-filer companies.

The proposed budget deficit is above 6% of GDP amounting to Tk 2.11 trillion, which may reach to 8% as the revenue collection has been showing slow trend in pandemic period, according to BUILD, a business development platform, in its budget reaction. The Business Initiative Leading Development (BUILD) thinks the deficit will mainly be filled taking loan from the banking sector and foreign loan. Also read: New budget unveiled with focus on protecting lives and livelihoods The dependence on foreign financing has been increased 162% than previous fiscal which is 'alarming', it said. The social safety net will be expanded, higher than the current fiscal. Government has given enough emphasis on health safety issues, which need proper implementation. Also read: New budget: Tracking prices going up and down In terms of export diversification in Medical and Personal Protective Equipment(MPPE), extension of tax exemption benefits up to June 2022 may encourage export diversification in this sector, BUILD said. On the other hand, it seems, sluggish investment will continue as COVID uncertainty remains, and private sector credit growth is still at a lower level(8.7%), according to BUILD.

The National Board of Revenue (NBR) is widening its net and realising outstanding taxes to meet the yearly revenue collection target of the Income Tax Wing. For 2020-21 fiscal, the target of Income Tax Wing is to collect Tk 1039.45 billion. But NBR data show that after January of this year, only Tk 408.15 billion or 39.26% of the target was collected. In January this year, the NBR has collected Tk 65.63 billion while it was Tk 61.88 billion in the same month of the previous year. The month-to-month basis growth is 6.06%.  Till January 2021, the NBR collected Tk 408.15 billion. The amount was Tk 383.27 billion in the corresponding period of last year with a 6.49% growth. NBR sources said the Board has directed the tax commissioners to bring all eligible persons and organisations under the tax net and take initiative to remove the phobia regarding hassle in tax payment. Also read: NBR to prioritize local industries in 2021-22 budget, says its chairman  It also asked to intensify the tax survey and activate the inactive TIN numbers as the submission of income tax returns have been made mandatory for every TIN holder from this fiscal. The Income Tax Wing has already issued directives to field offices in these regards. As part of the internal survey, the field-level officials are collecting possible taxpayers’ information from city corporations, Rajuk and other relevant authorities, and sub-registrar offices. This is popularly called ‘secondary data’ which refers to the information of the individuals that are already kept with any organisation.  The NBR has also started to collect information of potential taxpayers at the upazila level through secondary data gathering, otherwise known as internal survey. For example, a file of ‘X’ company mentioned that it has 450 employees. The official concerned can ask for the names of the 450 employees and their TIN numbers. Also read: Covid-19 impact: NBR devises ways to boost revenue collection With such little move, the NBR can find out eligible taxpayers’ names and put them under the tax net, if they are not already under it. “This is called internal survey,” a senior NBR official explained to UNB. The official said that at first, the NBR is taking information on the trade licences that have been issued from the city corporations and municipalities. Later, TIN will be issued in their names to bring them under tax net and collect revenue from them. Besides, he mentioned that NBR is collecting information of foreigners from Bangladesh Investment Development Authority (BIDA), vehicles owners from the BRTA, land buying and selling information from the sub-registry offices, power distribution offices and service-oriented offices. Information of flat and house owners are also being collected from the National Housing Authority, the NBR official said. All these efforts would help NBR identify eligible taxpayers who are still out of tax net. "We hope that this’ll help us raise revenue collection,” he added. Also read: NBR sets its sight on cranking up tax-GDP ratio  NBR sources said the board officials generally collect information of potential taxpayers by a door-to-door survey. This is how they find out new taxpayers. A senior official of the NBR said that the field officials have been asked to conduct their survey maintaining health safety rules. According to an official document, at the end of the 7th Five Year Plan, which ended on June 2020, the revenue-GDP ratio was to be 16.1% in 2019-20 fiscal after gradual improvement, but the achievement was estimated at 12.7% while it was 9.9% and 9.6% in 2018-19 and 2017-18 fiscals respectively. The total revenue collection for the budget for 2020-21 fiscal was set at Tk 3,780 billion where the NBR will contribute Tk 3,300 billion. The revenue from non-NBR sources was estimated at Tk 150 billion, while non-tax revenue at Tk 330 billion. Of the grand amount for the NBR, Tk 1,039.45 billion will come from income, profit and capital tax, while Tk 1,251.62 billion will be contributed by VAT. Supplementary tax will provide Tk 578.15 billion and Tk 378.07 billion will come from import duty. Tk 0.55 billion will come from export duty while Tk 36.86 billion from excise duty and Tk 15.30 billion as other taxes.  

Around 5,000 trucks loaded with goods are waiting to cross into Bangladesh at India's Petrapole land port,  on the other side of the Benapole border. While they have been stranded, trade between the two countries has been greatly affected. It has already had a major impact on revenue collection (import duties).

The National Board of Revenue (NBR) has devised five strategies to boost its revenue collection offsetting the negative impacts of the Covid-19 pandemic.

The High Court on Sunday issued a 5-point directive to collect all kinds of due revenues, including value added tax (VAT) and tax, from internet based companies including Facebook, Google.