Rushing into a new project without thoroughly evaluating past failures and assessing potential improvements is an inefficient use of public resources, according to Transparency International Bangladesh (TIB). The organisation warns that blindly adhering to donor-driven initiatives without addressing previous shortcomings is a flawed approach that risks further financial waste.
Despite multiple digitisation and automation projects aimed at improving revenue collection and transparency in public expenditure management, little progress has been made. This raises concerns over why these initiatives have failed to achieve their objectives.
Without addressing previous shortcomings or identifying solutions, the government is now preparing to launch another costly project. At the same time, TIB has called for the adoption of modern technology, particularly artificial intelligence (AI), to streamline income tax collection and curb tax evasion, while also prioritising domestic technological capacity and potential. This was outlined in a press release issued on Wednesday.
According to media reports, the National Board of Revenue (NBR), in collaboration with the World Bank, is planning a Tk 1,000 crore project to enhance tax collection and prevent evasion. However, the revenue department has already implemented at least three major projects over the past 15 years to boost domestic resource mobilisation through digitisation and automation, yet none have yielded tangible results.
TIB Executive Director Dr Iftekharuzzaman stated, "The attempt to launch another BDT 1,000 crore project backed by World Bank financing is a clear indication that previous initiatives have failed. Income tax filing and VAT collection processes remain predominantly paperwork-based, while harassment and corruption persist. Invoice fraud remains unchecked, and tax evasion and money laundering continue unabated."
"The tax-to-GDP ratio has not improved-in fact, it has declined over the past 12 years. In FY2024, it fell to 8.5%, compared to 9.1% 12 years ago. The average during this period was even lower, at 7.4%, placing Bangladesh among countries with the lowest tax-to-GDP ratios globally. Given this reality, why have previous projects failed? The factors contributing to these shortcomings must be examined-including corruption within the revenue department, reluctance to utilise domestic technological capacity, and inconsistencies in tax policy," he added.
A five-year project, Strengthening Institutions for Transparency and Accountability (SITA), formulated with World Bank support, has been allocated a budget of USD 250 million. Its objectives include simplifying income tax management, achieving full automation, improving statistical systems, increasing transparency in public procurement and investment management, and strengthening audit functions. A significant portion of the project will focus on automating public revenue and expenditure management.
Reflecting on past technological initiatives, TIB's Executive Director noted, "The software provided by contractors to automate income tax management was ultimately unusable. Instead, a local e-return filing system was developed at a lower cost. Similarly, another project saw the procurement of vendor-locked or commercial-off-the-shelf (COTS) software in line with donor conditions, resulting in operational difficulties. Given such experiences, rather than blindly following donor recommendations, technologies must be chosen based on practicality and long-term sustainability. Serious efforts should be made to build NBR's technical infrastructure through maximum utilisation of existing domestic technological capabilities and expertise."
Ordinarily, technology providers are responsible for training personnel and developing the necessary workforce.
However, Iftekharuzzaman expressed surprise over the project's provision to establish a skill development centre for Systems, Applications, and Products in Data Processing (SAP) technology. "Why is such a specialised centre being set up with borrowed funds, and for whose benefit? This must be investigated. Furthermore, whether there is an ulterior motive to bind the revenue department to specific proprietary software for an extended period should also be examined. Priority must be given to involving domestic technology firms in such initiatives, provided they possess the necessary competency and potential."
