The National Board of Revenue (NBR) has launched a coordinated joint audit initiative targeting sixteen of the country’s largest corporate groups.
The initiative aims to strengthen revenue collection and address Bangladesh’s persistently low tax-to-GDP ratio of around 6.6 per cent.
The drive integrates income tax and value-added tax (VAT) audits under a single framework to improve compliance, reduce revenue leakages, and help move the country closer to the estimated 15 per cent tax-to-GDP benchmark for sustainable fiscal development.
The initial phase will cover sixteen major industrial entities, including PHP Integrated Steel Mills Ltd, Square Toiletries Ltd, Bashundhara Paper Mills Ltd, Akij Food and Beverage Ltd, and Incepta Pharmaceuticals Ltd.
Economists said the initiative reflects a long-overdue attempt to fix structural weaknesses in the tax system, where indirect taxes still account for roughly two-thirds of total revenue.
“Relying heavily on indirect taxation limits equity and efficiency,” said former World Bank Dhaka office lead economist Zahid Hussain.
“A coordinated audit approach targeting large taxpayers is a rational step, because that is where the bulk of under-reported income and VAT mismatches usually occur,” he told TIMES of Bangladesh.
He added that integrating income tax and VAT audits could reduce duplication and improve enforcement consistency, provided institutions maintain technical capacity and independence.
Under the new framework, six dedicated audit teams led by senior officials will examine audited financial statements, income tax returns, and VAT filings of the selected firms.
NBR officials said the approach is intended to ensure assessments are based strictly on verifiable documentation rather than estimates.
Economists welcomed the emphasis on documentation but said institutional trust remains a key challenge.
“Bangladesh’s tax administration suffers from a confidence gap between taxpayers and regulators,” said Policy Exchange of Bangladesh Chairman M Masrur Reaz.
“If audits are perceived as arbitrary, compliance will not improve. Clear written explanations for adjustments and disallowances are essential to rebuild credibility,” he added.
The tax authority will examine risk indicators including unusual declines in sales, inconsistencies between reported revenues and expenses, and mismatches between VAT returns and audited financial statements.
NBR officials said the initiative is urgent to strengthen enforcement while encouraging voluntary compliance.
“This is not just about recovering unpaid taxes. It is about shifting the fiscal system towards transparency, predictability, and fairness—three conditions that are essential for long-term sustainable growth,” said NBR Member for VAT Audit and Modernisation Syed Mushfequr Rahman.
He added that the joint audit programme could help broaden the tax base and improve revenue mobilisation without increasing statutory tax rates.
Zahid Hussain said digitisation, legal clarity, and reduced discretionary interpretation are equally important as audits.
“If ambiguous tax provisions remain, litigation will continue to rise, undermining both revenue and investor confidence,” he added.
He further said a predictable tax system could improve Bangladesh’s attractiveness to investors, particularly in manufacturing and export-oriented sectors.
