The National Board of Revenue (NBR) plans to make Business Identification Number (BIN) mandatory for opening current accounts from the next fiscal year to widen the VAT net.
The proposal is likely to be placed in the national budget scheduled for June 11, officials said, adding that the tax authority has already assessed the potential impact of the move.
Officials expect the measure to bring a large number of informal businesses under the value-added tax system and boost revenue collection.
Value-added tax remains the largest source of NBR revenue as pressure builds on the government to increase collections to meet rising fiscal demands.
Bangladesh Bank data shows more than 93.49 lakh current accounts are active across the country, while over 75 lakh small and medium enterprises operate nationwide.
Officials said even partial VAT registration among these account holders could push the number of BIN holders beyond 40 lakh, raising VAT receipts.
At present, around 7.94 lakh entities are registered under VAT, of which about 4.48 lakh submit monthly returns.
Under existing law, businesses with annual turnover up to Tk30 lakh are exempt from VAT.
Entities with turnover between Tk30 lakh and Tk50 lakh pay a 4 per cent turnover tax, while those above Tk50 lakh must obtain a BIN and pay VAT.
“We are conducting a sector-wise survey to identify VAT-eligible firms,” said National Board of Revenue Member VAT Policy Md Azizur Rahman.
“If Parliament approves the move, a significant number of businesses are expected to come under the VAT net,” he added.
The move comes as Bangladesh accelerates digital reforms under the Strengthening Institutions for Transparency and Accountability project to improve revenue mobilisation and transparency.
Officials expect the reforms to enable end-to-end automation and strengthen oversight of business transactions.
However, concerns remain over implementation challenges.
Many rice and paddy traders and livestock farmers maintain current accounts and access bank loans but remain exempt from VAT under existing provisions.
“There should be a mechanism to distinguish such cases,” said VAT expert Bindu Saha.
“Individuals also open current accounts for personal use, raising questions on how compliance will be ensured,” he added.
Officials said such cases would be addressed through verification using bank data.
The NBR is considering a data-sharing arrangement with Bangladesh Bank to support digital verification and may amend VAT laws to align the proposal with existing turnover thresholds.
Bangladesh has long relied on indirect taxes, particularly VAT, due to weak income tax collection.
Efforts to improve the tax-to-GDP ratio have seen limited progress, largely due to administrative constraints and the dominance of informal businesses.
The NBR has expanded electronic return filing, introduced electronic fiscal devices, and strengthened enforcement in recent years.
“Making BIN mandatory for current accounts would be one of the most significant reforms, pushing many informal businesses towards formalisation,” said Policy Exchange Bangladesh Chairman M Masrur Reaz.
