Bureaucracy Blocks Bangladesh’s Bid for a Cashless Economy

More than five months after The City Bank applied for Bangladesh Bank’s approval to provide microloans, the regulator has yet to respond. Referring to the delay, National Board of Revenue (NBR) Chairman Md. Abdur Rahman Khan said the core problem lies in the lack of digitalization of government functions.

“The biggest problem is that our functions have not been digitalized, which is why we do not know how long a letter has been left pending. Because of this bureaucracy, the right work does not get done at the right time. Others have built the right systems, but we have not. That is why others are moving forward, while we are falling behind,” he said.

The NBR Chairman made the remarks on Wednesday, August 27, while addressing the Cashless Bangladesh Summit 2025 organized by the Institute of Cost and Management Accountants of Bangladesh (ICMAB) at Hotel Sonargaon in Dhaka.

He further noted that there are growing complaints about the unavailability of accurate data. “It is said that information used to be available earlier. Now it is not. This means data is not being produced properly, and that is why it is not being shared. It is like cutting off the head to cure a headache. If this continues, we will not be able to build a cashless society. This has to be considered in a broader context.”

Emphasizing that the government itself would benefit from a cashless economy through increased revenue, Khan said, “The amount of revenue leakage that currently occurs will be prevented. We will provide every kind of support necessary to make cashless transactions possible.”

In line with this, he noted, the latest budget introduced several initiatives. “For listed companies that conduct 100 percent of their transactions through banking channels, we have offered a special 2.5 percent tax rebate. Additionally, companies that spend more than or less than 50 percent of their costs—excluding material expenses—will be subject to new incentives and penalties.”

On online tax filing, Khan highlighted growing progress: “We are receiving good responses. Earlier, around 400,000 income tax returns were filed online. Last year, that number rose to 1.7 million. This year, as of today, 415,000 have already been submitted.”

Encouraging digital tax filing, he said four areas had been relaxed, including foreign taxpayers. “For overseas taxpayers, there is an OTP function. To remove difficulties, we are trying to allow mail as an alternative to OTP.”

Addressing the importance of smartphones in digitalization, the NBR Chairman said handset affordability must be ensured. In response to a question, he explained: “We do not receive full revenue from phone imports, nor do we have control over the market. Customers are often cheated, and local mobile phone manufacturers are the worst affected. Currently, there is no control over which phones can be activated by IMEI and which cannot. This allows unregulated phones to flood the market. Once restrictions are introduced, domestic producers will be encouraged.”

He added, “We hope the necessary software will be ready in the next few months. Once it is operational, we will be able to reduce taxes on locally produced phones and even consider making them VAT-free.”

The event’s chief guest was Bangladesh Bank Governor Dr. Ahsan H. Mansur. The keynote on “The Role of FinTech in Building a Cashless Economy” was presented by Dr. M. Masrur Reaz, Chairman and CEO of Policy Exchange Bangladesh.

Panel discussions included participants such as Md. Sharafat Ullah Khan, Director of the Payment Systems Department at Bangladesh Bank; Syed Mahbubur Rahman, Managing Director and CEO of Mutual Trust Bank PLC; Ali Ahmed, Chief Commercial Officer of bKash Limited; Zakia Sultana, Director at Mastercard Bangladesh; and Adnan Imtiaz Halim, Founder of Sheba Platform.

In the summit’s concluding session, Dr. Debapriya Bhattacharya, Distinguished Fellow of CPD, presented the keynote paper titled “Regulatory Reforms and Policy Roadmap for a Cashless Bangladesh.” Panelists included Dr. Md. Khairuzzaman Mozumder, Secretary of the Finance Division; Md. Abdur Rahman Khan, Secretary of the Internal Resources Division and Chairman of NBR; Dr. Md. Habibur Rahman, Deputy Governor of Bangladesh Bank; Masrur Arefin, Managing Director and CEO of The City Bank PLC; and Anita Ghazi Rahman, Founder and Managing Partner of The Legal Circle.