NBR intel detects 1,339 luxury cars hidden from tax records
Relevant tax offices have begun serving notices to the vehicle owners
The National Board of Revenue (NBR), through its Central Intelligence Cell (CIC), has discovered at least 1,339 high-end cars that have been purchased and used for years — even registered with the Bangladesh Road Transport Authority (BRTA) — but not declared in tax filings.
In addition, 409 more car owners were found who did not submit any tax returns. Officials from the NBR's CIC and Tax Department estimate that the value of each of these cars, including taxes, ranges from Tk1 to Tk10 crore.
The list includes luxury brands such as Toyota, BMW, Mercedes, Jeep, Land Rover, Audi, Range Rover, Porsche, Jaguar, Bentley, Rolls-Royce, Cadillac, Maserati, Tesla, Ferrari, and Lamborghini.
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While CIC and tax officials did not disclose full details of the owners hiding vehicle data, they confirmed the list includes businesspeople, government officials and their family members, politicians, and others, including business organisations.
Officials said that these owners did not disclose information of these vehicles in their tax files, meaning they concealed income equivalent to the car's value. This income may have been earned through illegal means.
The CIC has identified 5,489 such high-value cars in the country, of which 2,719 are declared. Tax authorities decided to reopen the files of 148 declared car owners because the information provided was considered unreliable.
Confirming the detection of 1,339 undeclared luxury cars, CIC's Director General Ahsan Habib told TBS, "Relevant tax offices have been asked to serve tax-related notices to the owners of these vehicles."
Seeking anonymity, a tax official from Dhaka's Tax Zone-18, where 12 undeclared cars were found, said, "After receiving CIC's letter, we have started issuing notices to the alleged owners."
"Most of the owners – individuals and companies – were identified using BRTA registration records. The process to collect the applicable taxes and fines has now begun," he said.
The official clarified that while the Tax Department will collect taxes, it is the Anti-Corruption Commission's responsibility to determine whether the money used to acquire these vehicles was obtained legally or illegally. Since the cars and their owners have been identified, it will be possible to trace the source of funds and determine legality.
NBR Chairman Abdur Rahman Khan told TBS, "Wherever tax evasion is found, those involved will be brought under the law."
Generally, high-value cars carry very high import taxes. In Bangladesh, import tax on luxury cars, depending on engine capacity (CC), can go up to as much as 800%. In addition, an advance tax must be paid at the time of registration.
However, NBR officials have clarified that customs houses are supposed to collect import taxes at the time of import, and advance tax is deducted during registration with the BRTA.
So, where did the tax evasion occur?
Officials explained that the money used to purchase these cars is not declared in the owner's tax file. According to existing income tax law, individuals are taxed on their income. The amount spent to buy the car is considered part of their income and, therefore, subject to tax.
For example, suppose someone purchases a car worth Tk5 crore but does not declare it in their tax file. That Tk5 crore will be added to their taxable income, and tax will be levied on it.
In Bangladesh, the maximum personal income tax rate in the past five years has been 30%. This means the individual would fall under the highest tax bracket, owing 30% tax on Tk 5 crore, which would be around TK1.5 crore.
On top of that, a 10% penalty applies for each year of concealment. So, if a car has been hidden from tax records for five years, the penalty alone would amount to at least 50% of the original tax liability.
How CIC traced the cars
Over the past six months, the CIC collected vehicle registration data from BRTA and forwarded it to the respective tax offices for verification.
By cross-checking with the Taxpayer Identification Number (TIN) database, it was revealed that many TIN holders had not declared these vehicles in their returns, while some had not filed returns at all.
But here's a twist — NBR's tax database has been integrated with BRTA's registration system for the past two years, which means this information should have been available in real time. So why wasn't it detected?
A senior NBR official explained that when registering a car with BRTA, only the TIN number needs to be provided. BRTA verifies whether the TIN is valid. After that, it is the responsibility of the vehicle owner to disclose the car and its purchase value in their annual income tax return. However, many individuals and entities did not report these cars in their tax files.
Action should be taken against owners: TIB
Transparency International Bangladesh (TIB) Executive Director Iftekharuzzaman has said the funds used to purchase undeclared luxury cars are likely illicit.
"The intent is clearly tax evasion. Since these cars were not declared in tax files, the income used is questionable, with a strong likelihood of illegal sources," he said.
"While the CIC has rightly unearthed the information and will collect unpaid taxes, the Anti-Corruption Commission must probe the source of the money. If spending does not align with declared legal income, the ACC should take action," he added.
