Bangladesh’s digital economy is expanding faster than the tax system can track, creating new challenges for revenue collection, the Bangladesh Economic Association (BEA) said.
The warning came at a pre-budget meeting held on Tuesday at the National Board of Revenue (NBR) headquarters, where BEA representative Professor Mohammad Masud Alam said current tax rules are not designed for online and cross-border income.
The association called for bringing all digital activities into the tax net, including social media businesses, freelance income from platforms such as Upwork and Fiverr, and subscription-based streaming services.
Global technology firms such as Google, Meta and Amazon should register locally and pay taxes through automatic deductions at payment gateways, it said.
Property taxation also needs reform, with BEA proposing a fully digitised land and asset registry linked with national identity data, and mandatory reporting of transactions at market value.
It recommended compulsory disclosure of assets above Tk50 lakh to improve transparency.
To address underreported rental income, BEA proposed mandatory digital lease agreements, linking utility services with national identity records, and imposing withholding tax on monthly rents above Tk30,000.
For high-income professionals, including doctors, lawyers and consultants, the association suggested third-party income reporting and tax deduction at source to ensure compliance.
A simplified tax filing system was also proposed, where pre-filled returns would automatically pull data from banks, employers and property records.
Significant revenue is being lost as many global digital companies operate in Bangladesh without formal registration, Prof Alam said.
He called for advanced data analytics to track cross-border transactions and location-based taxation rules so foreign firms earning from Bangladesh pay taxes locally.
He cited India, Malaysia and Estonia as examples of countries using data-driven systems to reduce tax evasion.
A National Financial Identity system linking ID cards with bank accounts, property records and utility bills could further improve income tracking and enforcement, he said.
Hospitals should report patient data by physician to better assess income in the medical sector, he added.
BEA also warned of policy inconsistency, noting that expansionary fiscal policy is being pursued alongside contractionary monetary policy.
It urged better coordination between fiscal and monetary authorities after the budget to ensure policy alignment.
