Long-awaited automation in revenue management has now started with the implementation of an online VAT refund module, mandatory online return filing, and a number of other measures. Economists and business executives have expressed relief at these developments.
The VAT and customs sectors have been further digitized, according to the National Board of Revenue (NBR). These steps will lessen taxpayer harassment and assist prevent tax evasion if they are executed correctly.
Over two million taxpayers have filed their electronic taxes online thus far in the 2025–2026 fiscal year. The NBR mandated that all taxpayers, with the exception of five groups, file their income tax returns online in August. Only nearly four million of the nation’s approximately 11.2 million Tax Identification Number (TIN) holders
Stakeholders believe that making online return filing mandatory will increase the number of return filers this year.
Last year, online return filing was made compulsory for individual taxpayers under specific jurisdictions, bank officials and employees across the country, and employees of several multinational companies. At that time, more than 1.7 million taxpayers filed returns online.
Meanwhile, to expand the tax net and boost revenue collection, the NBR has decided to establish 12 new commissionerates, customs houses and specialised units. Under this initiative, a total of 3,597 new positions have been created in the customs and VAT wings of the NBR.
An official told Media that this restructuring would strengthen institutional capacity for indirect tax collection, increase the tax-to-GDP ratio, expand investment and accelerate economic growth.
NBR officials said that through VAT automation, 100,000 business establishments will be brought under the VAT system next year. In the future, it will not be possible to operate businesses and service institutions without VAT registration. Accordingly, further measures are being considered to broaden the VAT base.
NBR Public Relations Officer Md Al-Amin Sheikh told Media that there are currently 644,000 VAT-registered entities in the country. Several initiatives have been introduced, including the e-Coefficient system, VAT smart invoices and a risk-based audit system to tackle VAT evasion. Efforts are also underway to register another 100,000 new VAT entities.
Speaking at a recent event on automation, NBR Chairman Md Abdur Rahman Khan said that systems and processes must be improved to reflect people’s expectations. “Revenue collection is always challenging, and the bigger the challenge, the greater the effort required. We want to ensure that taxpayers are not subjected to any form of oppression. At the same time, we are making strong efforts to prevent tax evasion,” he said. He added that audit guidelines have been issued for the first time, which include assessing whether a taxpayer is actually liable to pay tax. “We want to collect taxes from evaders,” he said.
Welcoming the automation initiatives, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Mahmud Hasan Khan told Media that corruption cannot be reduced without automation. “All processes, including bonded warehouse systems, must move rapidly towards automation,” he said.
Tax audits involve examining taxpayers’ records to verify whether the accounts and documents submitted with tax returns are accurate. During audits, tax officials may request various supporting documents as evidence. Previously, return audits were conducted manually, and there were allegations of repeated harassment of the same taxpayers. The NBR has now taken steps to introduce a risk-based system for selecting returns for audit. However, due to the lack of complete data, the NBR has not yet been able to fully implement an automated system.
On November 10, the NBR launched an online VAT refund module aimed at enabling online applications, processing, and direct transfer of refunds to taxpayers’ bank accounts.
When a business purchases raw materials or services, it pays input VAT. When it sells goods or services, it collects output VAT from customers. If the input VAT exceeds the output VAT, the excess amount can be claimed as a refund. However, businesses had long complained about not receiving VAT refunds and repeatedly raised the issue in meetings with the NBR.
The NBR has also initiated several automation processes, including bond automation, the launch of the Bangladesh Single Window, import and export through the green channel, bonded facility access for partial exporters, faster clearance even in cases of HS code mismatches for bonded goods, and the introduction of the Customs Bond Management System (CBMS).
Economist Dr Mahfuz Kabir said that automation would improve revenue collection management, but increasing tax collection also requires an overall improvement in the economic environment.
During the first four months (July–October) of the current 2025–26 fiscal year, revenue collection amounted to Tk 118,000 crore, marking a growth of 14.2% compared with the same period last year. The revenue target for the current fiscal year was initially set at Tk 499,000 crore. However, on November 24, the government decided to raise the target by an additional Tk 54,000 crore, setting a new target of Tk 554,000 crore. While revenue targets have been reduced in the past, this is the first time in the country’s history that a target has been increased.
Commenting on the decision to raise the revenue target, Dr Mahfuz Kabir told Media that such decisions should ideally be taken by an elected political government. “If such a decision comes in the middle of the fiscal year, businesses may actually be adversely affected. Therefore, it is important to consider how justified this change is,” he said.
