Fully automated tax monitoring targeted by 2027 amid long-standing delays
The move comes as revenue collection faces increasing pressure, with Bangladesh recording one of the lowest tax-to-GDP ratios in Asia
Highlights:
- Bangladesh plans nationwide automated tax monitoring system by 2027
- Goal: reduce tax evasion, improve low tax-to-GDP ratio
- Automation efforts ongoing for over decade with limited success
- Plan includes risk-based audits and real-time data integration
- Experts doubt timeline due to past failures, internal resistance
- Weak data sharing and manual processes hinder effective enforcement
Bangladesh's tax authority is once again pledging to introduce a fully automated compliance monitoring system, this time with a deadline. The National Board of Revenue (NBR) says it aims to roll out a nationwide automated system by 2027 to curb widespread tax evasion and improve the country's declining tax-to-GDP ratio.
The move comes as revenue collection faces increasing pressure, with Bangladesh recording one of the lowest tax-to-GDP ratios in Asia. Despite more than a decade of efforts and significant spending on digitalisation, only limited portions of income tax, VAT, and customs services have been automated so far.
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Senior NBR officials said the plan will begin by making existing online return filing and e-audit systems fully functional. This will be followed by the introduction of risk-based audits for both individual and corporate taxpayers within the year. The authority also plans to integrate real-time data with key institutions – including banks, land offices, and vehicle registration authorities – before launching the full monitoring system.
NBR Chairman Abdur Rahman Khan said, "While several tax services are already online, the next step is to link tax data with other government and financial databases. Once integrated, the system will be able to track transactions more efficiently and identify non-compliant taxpayers quickly."
However, the timeline has raised doubts among experts and former officials, who note that similar promises over the past 15 years have seen limited success. Large-scale projects funded by both domestic and foreign sources have failed to deliver the expected level of automation.
Former NBR chairman Muhammad Abdul Mazid believes full automation within a year is unrealistic. "Automation has been discussed since the 1990s, yet meaningful results remain limited," he said.
He also questioned whether there is sufficient internal support within the NBR for such a system, noting that both some officials and non-compliant businesses may lack incentives to embrace full transparency. He added that past projects often consumed time and funds on consultancy, logistics, and administration without producing tangible outcomes.
Mazid emphasised that while the 2027 deadline may be ambitious, the NBR must remain committed to implementation. He also stressed the need to bring all relevant institutions under digital systems to enable effective data sharing.
Bangladesh's tax-to-GDP ratio has declined from around 10% a decade ago to just 6.6% in the 2024-25 fiscal year – one of the lowest in Asia. Experts attribute this to tax evasion, widespread exemptions, and institutional inefficiencies.
There is no official estimate of revenue losses due to tax evasion, but a study by the Centre for Policy Dialogue suggests that losses exceeded Tk1.26 lakh crore in 2023.
Over the past decade and a half, the government has launched more than ten initiatives to automate tax administration, including online TIN registration, income tax returns, VAT systems, refund mechanisms, customs bond automation, and the National Single Window. However, many of these systems remain only partially functional. For instance, the online income tax system still relies partly on manual processes, while VAT automation and customs bond systems continue to face operational challenges.
Weak data integration
Stakeholders say resistance from some officials, frequent leadership changes at the NBR, and political transitions have slowed progress. Data integration with other institutions has also lagged, limiting the effectiveness of enforcement.
Currently, tax authorities must manually collect data from banks, land offices, city corporations, and utility providers, making it difficult to detect tax evasion at scale. Although there have been efforts to access banking data, lack of cooperation from financial institutions has hindered progress.
