The National Board of Revenue (NBR) has launched a new initiative to expand Bangladesh’s limited VAT base, writing to 465 trade associations for full membership lists of affiliated businesses.
Officials said the narrow VAT net forces the authority to rely on the same taxpayers year after year, increasing the risk of evasion and keeping revenue growth below potential. International lenders have also urged improvement in the tax-to-GDP ratio.
Currently, around 800,000 businesses are VAT-registered, but only 550,000 — roughly 70 per cent — file returns regularly, officials noted. With the country’s economic expansion, this coverage is far from adequate. The revenue authority aims to double VAT-registered businesses to 2 million within the next year.
“Letters have been sent to 465 trade associations requesting lists of their member businesses,” an NBR official said, speaking on condition of anonymity. “The lists will go to VAT commissionerates, which will verify the data and bring unregistered firms into the system.”
For the upcoming fiscal year, NBR’s total revenue target is expected at Tk6,04,000 crore, with VAT alone projected to exceed Tk3,00,000 crore. By comparison, the current fiscal year’s VAT target was Tk1,86,000 crore. Officials stressed that achieving such targets is impossible without substantially widening VAT registration.
Trade bodies have been asked to provide separate details on members without a Business Identification Number (BIN) to identify unregistered, inactive, or closed businesses.
“Many businesses operate without VAT registration. Even among those with a BIN, returns are often irregular, leaving significant revenue untapped,” said Md Azizur Rahman, NBR Member (VAT Policy). “Using trade body data, we can bring unregistered businesses under the VAT umbrella and better monitor irregular filers.”
Business representatives said enforcement alone is insufficient. They called for a simpler, fully digital registration and return-filing process. Md Imran Hasan, Secretary General of the Bangladesh Hotel-Restaurant Owners Association, urged expanded awareness campaigns and training programmes targeting small business owners.
The drive reflects NBR’s dual focus: capturing untapped revenue and improving compliance, while incentivising transparency in an economy where informal business activity remains high.
