B Mirror Report: The government is set to propose a series of administrative and technology-driven reforms in the national budget for fiscal year 2026-27 aimed at expanding the tax base, improving compliance, and curbing tax evasion.
Under the draft budget proposals, obtaining a Tax Identification Number (TIN) will become mandatory for opening any new bank account in the country. Existing account holders will also be required to provide a TIN to keep their accounts active, according to officials of the National Board of Revenue (NBR).
Revenue officials said the measure is expected to significantly increase the number of registered taxpayers and improve customer verification within the banking system. The initiative is also intended to help curb illicit financial flows, money laundering, and suspicious transactions by reducing opportunities for anonymous banking.
The proposed requirement is part of a broader effort to bring a larger segment of the population under the tax net and make it more difficult to conceal income and assets.
However, NBR officials said certain groups may be exempt from the requirement, including students, government allowance recipients, individuals and institutions enjoying tax exemptions through official gazette notifications, and holders of “no-frills” accounts designed to promote financial inclusion.
Banking sector stakeholders have expressed concerns that the policy could discourage small depositors and low-income individuals from using formal banking channels.
They argue that some people may choose to keep their savings outside the banking system to avoid perceived tax-related complications, potentially reducing deposits and increasing cash-based transactions. Critics also warn that the move could encourage informal financial practices, including hundi transactions.
Industry representatives further noted that many individuals obtaining TINs solely to maintain bank accounts may ultimately submit “zero returns,” increasing the administrative workload of the tax authority without generating substantial additional revenue.
Abdul Hai Sarker, chairman of Dhaka Bank and president of the Bangladesh Association of Banks (BAB), said the government should instead focus on bringing unregistered businesses under the tax system.
“There are around 150,000 to 200,000 business entities in the country that do not have TINs. Most of them are potentially taxable and should be brought into the tax net,” he said.
The draft budget also proposes making TIN mandatory for the registration of motorcycles with engine capacities of 150cc or above. However, motorcycle owners would not be required to pay any additional advance tax during annual registration renewals.
To improve tax collection across supply chains, the NBR plans to introduce a 0.20 percent advance tax on the value of goods supplied by manufacturers or importers to retailers. Under the proposal, a tax of Tk 2 would be collected on every Tk 1,000 worth of goods supplied.
In the real estate sector, the government is considering a restructuring of area-based tax rates for land and apartment registrations, alongside a revised framework for source tax collection.
The budget proposals also include stricter enforcement measures for withholding tax compliance. Institutions and withholding authorities that fail to submit withholding tax returns on time could face penalties and disciplinary action. Authorities are also planning to introduce mandatory Withholders Identification Numbers and create a dedicated database to strengthen monitoring.
Meanwhile, the government may reduce the source tax rate on electricity purchases from power producers from 6 percent to 3 percent, a move expected to lower production costs and ease capital pressures in the power sector.
The proposed measures are part of the government’s broader strategy to strengthen revenue collection, improve transparency, and modernize tax administration in the coming fiscal year.
