The National Board of Revenue (NBR) has outlined a comprehensive roadmap for domestic revenue mobilisation (DRM) through its newly launched Medium- and Long-Term Revenue Strategy (MLTRS) for FY2025-26 to FY2034-35, emphasising the need for sustained reforms and institutional capacity building to support Bangladesh’s development ambitions.
Despite notable progress, the NBR noted that more needs to be done to achieve the government's goal of becoming an upper middle-income country by 2031.
Key focus areas of the strategy:
Comprehensive Tax Reform: The strategy highlights reforms across income tax, VAT, and customs, aiming to modernise tax administration and improve compliance.
New Income Tax Act 2023: Replacing the 1984 ordinance, the new law introduces global best practices to simplify tax filing and reduce evasion.
Structural Expansion: The NBR has added 10 new tax zones, 3 specialised units (including an intelligence unit), 220 tax circles, and 40 range offices to widen the taxpayer base.
Income Tax remains a weak link
Despite reforms, income tax contributed just 2.58% of GDP in FY2021-22, according to Finance Division data. While per capita income has more than doubled over the past decade, income tax collection has lagged behind.
To address this, NBR is:
Expanding digital services such as online return filing, e-TDS, and mobile banking-enabled tax payments.
Introducing systems like the Document Verification System (DVS) and Office Management System (OMS) to improve oversight.
Using the Automated Challan System (ACS) to monitor real-time tax collections.
Customs modernisation under the Customs Act 2023
The newly enacted Customs Act 2023 replaces the outdated 1969 law and brings the framework in line with global trade standards. Key initiatives include:
National Single Window (NSW) platform for trade documentation by 2026.
Automation of bonded warehouse management to prevent revenue leakages.
Tools like e-Appeal, e-Auction, e-Advance Ruling, and Detained Goods Management System.
Establishment of a Customs Risk Management Commissionerate and development of an Automated Risk Management System (ARMS).
A new Customs Strategic Plan (2024–2028) aims to build skills in trade policy, risk analysis, and data analytics, supported by a modern training academy and e-learning platform.
VAT reforms address structural challenges
VAT reform is tackling issues like multiple rates, cascading tax effects, and rebate complexities. Key measures include:
Upgrading the Integrated VAT Administration System (IVAS) and linking it with company accounts to curb evasion.
Expanding the use of Electronic Fiscal Devices (EFDs) and the Sales Data Centre (SDC).
Introducing e-invoicing, online VAT returns, and awareness campaigns like VAT Day and VAT Week.
Annual VAT expenditure analysis and a review of VAT exemptions and SROs to widen the tax base.
Better tracking of tax expenditures
The NBR has institutionalised annual reports estimating tax expenditures and forgone revenue since FY2020-21. This move aims to enhance fiscal discipline and reduce inefficiencies in tax policy.
The NBR’s strategy is designed not only to raise revenue collections but also to foster greater transparency, strengthen taxpayer services, and build a robust institutional foundation for long-term development. Automation, capacity building, and legal reforms lie at the heart of these efforts.
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