Businesses flag harassment by field-level tax officials to NBR chief, cites arbitrary valuation, higher duties

Business leaders have raised allegations of harassment by customs, VAT, and income tax officials with National Board of Revenue (NBR) Chairman Abdur Rahman Khan, citing arbitrary decisions, raids, and excessive fines as major obstacles to trade.

Voicing their grievances, they also highlighted how various legal provisions of the NBR are causing them harassment.

The concerns came up today (10 September)  at the NBR headquarters in Agargaon, Dhaka, during a "Meet the Businesses" programme.

According to business representatives, customs officials frequently increase the declared value of imported goods through arbitrary valuation, forcing importers to pay higher duties.

They also pointed out that raids on business premises, during which documents and computers are seized, have created an atmosphere of fear.

They also highlighted complications with Harmonised System (HS) codes in import-export, excessive fines, and the impact of high minimum taxes, which raise effective tax rates. Many businesses, they added, face delays or denials when seeking VAT refunds from the NBR.

All the drives are against us but there are 482,000 restaurants in the country. We cannot survive under the oppression of your field officers..VAT rates are fixed without any consultation with us. It is very hard to do business under such high VAT 

Imran Hassan, secretary general of the Bangladesh Restaurant Owners Association 

However, despite these concerns, participants also thanked the NBR for recent business-friendly measures.

Responding to the grievances, NBR Chairman Abdur Rahman Khan acknowledged the problems and urged businesses to join automation initiatives to reduce harassment.

He said steps were being taken to allow small exporters without bonded licences to import raw materials duty-free. He also emphasised the introduction of a standard or single VAT rate, even if lower, to simplify the system.

However, he made it clear that tax exemptions would be reduced further. "We cannot continue to bear exemptions anymore," he said, noting that despite collecting Tk3.77 trillion in the 2024–25 fiscal year, the tax-to-GDP ratio had declined.

Strong criticism from business leaders

At the meeting, Imran Hassan, secretary general of the Bangladesh Restaurant Owners Association, complained that raids disproportionately target restaurants.

"According to government figures, there are 482,000 restaurants in the country, but all the pressure is on just 13,000 of us. All the drives are against us. We cannot survive under the oppression of your field officers," Imran told the NBR chairman.

"Your officers, together with some of our own people, are engaged in extortion. VAT rates are fixed without any consultation with us. It is very hard to do business under such high VAT," he added.

He further warned of protests if the Electronic Fiscal Device (EFD) system was applied inconsistently. "Some shops are being given the software, others are not. If this continues, we will go back to the streets," he said.

A representative of the Bangladesh Cosmetics and Toiletries Importers Association alleged that arbitrary customs valuation has in some cases doubled import taxes.

Nasir Khan, vice president of the Leather and Footwear Manufacturers and Exporters Association, said many cases filed by NBR officials later proved false. "In existing laws, there are punishments for filing false cases. The same should apply to officials who lodge such cases," he demanded.

Another businessman from the Benapole area said seizures of computers and documents by VAT officials at the local customs house had caused panic among traders there.

While recognising many of the complaints, Abdur Rahman Khan also cautioned that some businesses try to evade taxes.

"When someone does not provide proper accounts, there will be disturbance, even seizures. If you are in the right, then why worry if even your computer, or you yourself, are taken away?" he remarked.

He urged businesses to file specific complaints in cases of irregularities by officials and called for cooperation in ensuring the success of new automation initiatives, including the National Single Window and bond automation.