NBR launches automated e-VAT refund system to ease taxpayer hassles

The National Board of Revenue (NBR) has launched an automated online VAT refund system aimed at simplifying the refund process and ending the long-standing sufferings of taxpayers.

Under the new system, approved VAT refunds will be transferred directly to taxpayers' bank accounts through the Bangladesh Electronic Fund Transfer Network (BEFTN), eliminating the need for physical visits to VAT offices.

NBR Chairman Abdur Rahman Khan formally inaugurated the service today (7 January) at the Revenue Bhaban in the capital's Agargaon. 

During the inauguration, he initiated the first batch of refunds amounting to Tk45.35 lakh, transferred directly to the bank accounts of three taxpayers from three Dhaka-based VAT commissionerates.

"We want to make the tax management process fully transparent and accountable. This digital initiative will ensure that genuine taxpayers receive their refunds without any manual intervention or delay," Abdur Rahman said.

He said automation had been his priority since assuming office, replacing the paper-based refund system that had long been criticised for delays and harassment.

"I have clearly said we will not give paper-based refunds. We needed some time to build the system, but ultimately it started today. Once it stabilises, it will be generalised," he said, adding that income tax refunds would also be brought under a similar automated framework once the VAT system proves successful, reports UNB.

How the system works

Under the new process, taxpayers will need to provide their bank account details only once. Refund applications will be submitted through monthly online VAT returns.

"The taxpayer will simply click the 'refund request' button. Everything else will be handled on our end," the NBR chairman said, noting that refunds would be paid directly from Bangladesh Bank.

The NBR has integrated a dedicated refund module into its existing e-VAT system, which is digitally connected to the Finance Division's Integrated Budget and Accounting System (iBAS++) and the Bangladesh Bank payment gateway.

"Those who collect revenue do not keep the accounts. The Controller General of Accounts maintains the accounts and Bangladesh Bank handles the money. This separation ensures transparency and prevents manipulation," Abdur Rahman said.

Once a VAT commissionerate processes and approves a refund application, the system automatically initiates the fund transfer to the taxpayer's bank account.

Previously, VAT refunds involved extensive paperwork and repeated visits to tax offices, often leading to long delays and complaints from businesses. With the new module, the entire process has become paperless and contactless.

An NBR official said the move was part of a broader push to digitise all revenue board activities. "It will save time and cost for businesses and improve the ease of doing business in Bangladesh," the official said.

The revenue board has advised taxpayers to contact their respective VAT commissionerates for any technical assistance or information related to the new online refund module.

Refunds 'normal part' of tax system

Rejecting the notion that refunds should be discouraged to protect revenue, the NBR chairman said refunds were a normal feature of modern tax systems.

"If we collect Tk4 lakh crore in revenue and need to return Tk4,000 crore as refunds through a transparent process, there is nothing wrong with that. Around the world, refunds are part of the system and we should follow that principle," he said.

Abdur Rahman also referred to recent initiatives to increase online VAT return submissions, noting that many taxpayers had faced penalties because their previously submitted paper returns had not been uploaded into the system.

To address this, the NBR has launched a crash programme allowing taxpayers to enter their past paper returns into the e-VAT system themselves, ensuring updated records and avoiding compliance issues.

The NBR chairman said preparations were also underway to make online VAT return submission mandatory through amendments to the VAT law, similar to the income tax regime.

According to NBR data shared at the event, 115 refund applications amounting to Tk124.49 crore have already been submitted through the new system, with around Tk50 lakh being disbursed on the first day.