Govt moves to make A-challan mandatory for stamp duties to boost revenue
To go along existing system for one year from 1 July before made obligatory
The government has decided to introduce the payment of non-judicial and insurance stamp duties through the automated challan (A-challan) system from 1 July this year to curb fraud, increase revenue collection, and digitise public services.
Under the decision, taxpayers will be allowed to pay non-judicial and insurance stamp duties through both the existing system and A-challan between 1 July 2026 and 30 June 2027. From 1 July 2027, payment through A-challan will become mandatory, with no alternative payment method permitted.
The ministry is expected to issue a gazette notification in June, making payment of non-judicial and insurance policy-based stamp duties through A-challan compulsory under the new framework.
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The decision was made at a meeting on the automation of stamp duty payments held on 13 May and chaired by Md Abdur Rahman Khan, secretary of the Internal Resources Division and chairman of the National Board of Revenue, according to the meeting minutes.
On 24 May, the Internal Resources Division issued letters to relevant government agencies and institutions, instructing them to implement the decision.
Towfiqul Islam Khan, additional director of research at the CPD, told TBS, "When any tax is paid through the A-challan system, it will be instantly deposited into the state treasury, which will ensure swift revenue collection for the government and eliminate evasion."
He added that a dedicated platform should be developed for A-challan, allowing clients to make direct payments from their mobile financial services accounts, bank accounts, and credit or debit cards.
A dedicated platform should be developed for A-challan, allowing clients to make direct payments.
Existing system
At present, stamp duties of up to Tk1,200 are paid through the purchase of non-judicial stamp papers. Such stamps are used for 65 categories of documents and transactions, including property transfer deeds, wills, leases, mortgage deeds, powers of attorney, memoranda of association, gift deeds, loan agreements, certificates and affidavits.
Where stamp duty exceeds Tk1,200, payment is made through pay orders.
Insurance-related stamp duties are currently paid using insurance stamps. However, when the stamp duty exceeds Tk2,000, payment is also made through pay orders. Stamp duties related to company registration and share transfers are likewise paid through pay orders. Stamp duties are also payable in court fee and electronic registration processes.
Push for automation
According to documents presented at the meeting, the existing stamp duty collection process is time-consuming, costly and vulnerable to fraud, making automation necessary.
The government has collected stamp duties through impressed and adhesive stamps since 1899. The process involves The Security Printing Corporation (Bangladesh) Ltd, the Directorate of Posts and district treasuries.
Impressed stamps are printed, embossed or engraved directly onto paper, while adhesive stamps are label-type stamps affixed to documents. Court fee stamps, revenue stamps and postal stamps fall within the adhesive category.
Finance ministry officials told TBS that the government is pursuing various initiatives to increase non-NBR and non-tax revenues, with automation of stamp duty payments forming part of that effort. Preventing the use of counterfeit stamps is also a key objective.
One official said insurance stamps are particularly vulnerable to fraud, with some insurers collecting stamp fees from customers without depositing the corresponding amounts into the government treasury. To address the problem, the government is planning a system under which insurance companies would pay the aggregate stamp duties of their customers in a single transaction.
Revenue target
According to official documents, the government set a revenue collection target of Tk11,885.20 crore from stamp duties for the fiscal 2025-26.
Revenue collection from stamp duties stood at Tk4,093 crore in FY23, falling significantly short of the Tk13,879 crore target.
Officials say the revenue collection from the sector will increase significantly when the A-challan system comes into effect.
Agencies raise operational issues
During the meeting, Mohammad Noor-e-Alam, additional registrar of the Registrar of Joint Stock Companies and Firms, said the agency had been collecting stamp duties for company registration and share transfers through A-challan since 1 February.
Md Ashrafuzzaman, deputy inspector general of the Registration Department, noted that registration applications are sometimes rejected after stamp duties have been paid. In such cases, refunding stamp duties paid through A-Challan can become complicated, he pointed out.
Ashrafuzzaman suggested introducing a mechanism to place paid stamp duties "on hold" until the registration process is completed. Once registration is finalised, the funds could then be transferred to the government treasury. He said the department is discussing the matter with the authorities of iBAS++.
However, Bangladesh Bank Joint Director Arafat Hossain told the meeting that the central bank had no objection to keeping stamp duty payments on hold until document registration is completed and subsequently transferring the funds to the Treasury Single Account.
