Digital Drive to Deliver Easier Tax Collection: NBR Chairman

The Chairman of the National Board of Revenue (NBR), Md. Abdur Rahman Khan, has stated that the collection of tax and VAT returns will become easier for the government once all processes are digitized.

Speaking at an event organized by the Centre for Policy Dialogue (CPD) in Dhaka’s Gulshan on Tuesday, August 26, Khan said, “If everything becomes digital everywhere, tax and VAT returns will be received easily. The growing scope of tax exemptions has made it difficult to increase the tax-to-GDP ratio. If sufficient tax cannot be collected, there will be problems.”

He added that until the full implementation of automation, VAT audits will remain suspended. “Businesses should not think this step is taken for unnecessary harassment. Work is in progress,” he said.

Commenting on the minimum tax law, the NBR chief described it as a “black law.” He said, “There is no doubt that the minimum tax is unjust. This must be acknowledged. Taxes in business should be on profits. By imposing minimum tax, we create distortions. If we try to fix these, revenue collection declines. When the system is properly in place, we will be able to implement reforms. This year, we have tried to create a more business-friendly environment. Unless business becomes easier, revenue collection will remain difficult.”

Khan also highlighted a new project launched with World Bank assistance. “We want an automated NBR. If everything can be digitized, VAT and tax returns will be processed at the push of a button. The quality of our audit reports is questionable. Looking at the audit declarations, it is clear the real picture has not emerged.”

He further explained, “We have stopped manual selection in audits at NBR. With manual selection, the same person was often targeted year after year. Now, audits will be risk-based. Until we implement a digital system, manual VAT audits will remain suspended. If necessary, audits will remain suspended indefinitely. We must automate.”

On broadening the tax net, Khan said, “If we can expand the tax base, we can reduce both tax and VAT rates. With proper compliance, a single VAT rate will be possible. Refunds should also go automatically into taxpayers’ accounts.”

The session, moderated by CPD Research Director Khondaker Golam Moazzem, included a keynote paper presented by CPD Senior Researcher Md. Tamim Ahmed.

The CPD study revealed that most businesses in Bangladesh believe the current tax rates are unjust and hinder business growth. According to the survey, 82 percent of respondents described the tax rates as “unfair.” The research, conducted with the support of Christian Aid (CA), also showed that 79 percent of businesses identified lack of accountability among tax officials as a major issue, while 72 percent cited corruption in tax administration as a key obstacle.

Furthermore, the absence of a fully digital tax submission system emerged as another challenge. The survey of 123 firms in Dhaka and Chattogram found that 65 percent of businesses frequently face disputes with tax officials over demands.

Many entrepreneurs also alleged that officials sometimes impose taxes arbitrarily without proper explanation or prior notice, creating invisible pressures beyond the actual tax amount, which they see as more damaging to business. Additionally, 73.5 percent of respondents identified the complexity of VAT regulations as a major impediment.