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The NBR has already introduced some measures to boost revenue, such as making online filing of returns mandatory for individual taxpayers, which is expected to increase income tax collection.

The use of the ASYCUDA system data has been made mandatory for customs and income tax departments, enabling better information exchange and verification. This will make tax assessment and collection more transparent and efficient.

Additionally, with Tk 1,000 crore in World Bank funding, the “Strengthening Domestic Revenue Mobilisation” project has been launched to fully digitise NBR operations.

VAT registration thresholds have been lowered: the listing limit from Tk 50 lakh to Tk 30 lakh, and the registration limit from Tk 50 lakh to Tk 2.5 lakh.

Currently, 13 percent of government revenue comes from non-NBR taxes and non-tax revenue.

For the next fiscal year, the non-NBR tax target is expected to be set at Tk 25,000 crore, up from Tk 20,000 crore this year, though only Tk 5,786 crore was collected in the first eight months.

Non-tax revenue has performed better, with Tk 40,000 crore collected against a Tk 65,000 crore target. Next year’s target is likely to be Tk 66,000 crore.

Bangladesh’s tax-to-GDP ratio remains among the lowest globally. The government plans to raise the ratio to 9.2 percent in the next fiscal year.

The target was 8.6 percent in the revised budget for this fiscal year. Last fiscal year, the ratio stood at 6.8 percent.

The focus in the upcoming budget will be on expanding the scope of income tax and VAT, said NBR Chairman Abdur Rahman Khan.

There are about 1.28 crore income taxpayers but fewer than 800,000 VAT payers. Significant legal changes will be made to increase VAT collection, Khan said.

He noted that the 15 percent VAT rate has not yet been effectively implemented, though work has begun to establish it as a standard, especially for marginal SMEs facing compliance issues.

If sufficient data is available, a fixed VAT system may be introduced for new and small entrepreneurs.

Digitisation will be prioritised to reduce tax evasion.

Globally, tax management is being improved through product tracking and tracing. Bangladesh plans to introduce this system first for tobacco products, ensuring each product is recorded at the factory.

Citizens will be able to scan items with smartphones to verify VAT payment. Whistleblowers will be rewarded and offenders fined. This system will gradually extend to other products, the NBR chief said.

He emphasised that the main goal is to expand the tax and VAT base. Non-filers will be identified through automated systems.

Among the 1.28 crore TIN holders, those with unnecessary registrations or no taxable income will be deregistered, and deceased persons’ TINs will be closed.

E-return systems will automatically identify non-filers and issue notices, reducing disparities between regular taxpayers and non-filers.

“The key question is how realistic the revenue target is and what measures are needed to achieve it,” said Selim Raihan, executive director of the South Asian Network on Economic Modelling (SANEM).

He noted that NBR sets ambitious targets every year but rarely implements structural reforms.

Without major reforms, such goals cannot be achieved, Raihan said.

While discussions and research on tax reform have been ongoing, initiatives such as dividing NBR into policymaking and implementation bodies have stalled, Raihan said.

The government’s next steps remain unclear, he said, adding that a strong commitment to reform is essential.

In practice, the lack of reform leads to increased pressure on existing taxpayers and greater reliance on indirect taxes, such as higher import duties and surcharges.

“These are not sustainable solutions.”

As a solution, he called for major restructuring of the tax system, including bringing untapped taxpayers into the net and reducing tax evasion.

Tax exemptions, which amount to five to six percent of GDP, must be reduced to achieve desired revenue levels.

He further emphasised the need for a single VAT rate, simplification of existing laws and reform of the income tax structure.

However, resistance from the business community remains a challenge.

“Strong political will is crucial; otherwise, the economy risks falling into a low-level equilibrium trap where ambitious targets are set but remain unattainable,” Raihan added.