NBR to fully operationalise bond automation this month to boost trade efficiency

The National Board of Revenue (NBR) is set to fully operationalise its bond automation system this month, aiming to enhance efficiency, transparency, and accountability in the country's trade operations.

NBR officials say the revenue authority was prepared to roll out the system last month but postponed the launch due to a lack of readiness among businesses.

"Due to insufficient preparation from the business community, we have deferred the process by a month," NBR Chairman Md Abdur Rahman Khan said recently.

He noted that one of the most frequent complaints he receives is regarding the bond management system.

The NBR's bond automation initiative is a key part of its efforts to curb misuse, which has been causing significant revenue losses to the national exchequer in the form of unpaid duties and taxes, the officials say.

Under the bonded warehouse system, export-oriented industries are allowed to import duty-free raw materials, such as fabrics, against a commitment to export the finished goods.

This system helps keep Bangladesh's exports competitive by reducing production costs and shortening lead times.

The garment sector, which accounts for a major portion of Bangladesh's exports, benefits significantly from this facility.

According to the Dhaka Customs Bond Commissionerate, 90% of woven fabric, 45% of garment accessories, and 35% of knit fabric for the readymade garment sector are imported under the bond system, while the rest is sourced locally.

However, some unscrupulous traders abuse the facility by selling duty-free imports in the local market instead of using them for export production.

"We want to curb duty and tax evasion," a senior NBR official told UNB. "We are at the final stage of setting up the automation system, but additional research is being conducted to ensure effectiveness."

The automation system will enable authorities to track materials imported under bond facilities, reducing opportunities for misuse.

The initiative is designed to streamline key processes, including the issuance of utility permission for garment accessories exporters and utility declaration for garment exporters. This will facilitate faster processing and improve accountability in the system.

The NBR had announced that all customs bond services are ready for implementation, with bond licence holders requiring to complete their transition by 31 December 2024.

The bond automation project was initially launched in 2017, with a completion target of June 2021.

However, delays in implementation led to an extension until June 2023. Now, with the final phase underway, the NBR is confident that the system will soon be fully functional.

The automation of bonded warehouse services is expected to bring several advantages. By reducing paperwork and manual processing, the system will accelerate bond-related activities, benefiting exporters.

Digital monitoring will minimise opportunities for misuse and ensure greater accountability among stakeholders.

Streamlining procedures will lower business costs, making exports more competitive.

Faster and more efficient processing of bond-related services will create a smoother trade environment, boosting exports.

Local traders and industry leaders have long demanded stricter enforcement against those who exploit the bond system. The automation project is expected to address these concerns by strengthening oversight and ensuring compliance.

NBR's commitment to automating the bond system aligns with Bangladesh's broader strategy to modernise trade facilitation and expand its export base. By implementing digital solutions, the government aims to reduce foreign exchange losses and enhance competitiveness in global markets.

As the implementation progresses, stakeholders remain optimistic that the new system will bring much-needed reform, improving efficiency and accountability in the country's bonded warehouse operations.