Bangladesh significantly expanded its value-added tax base in December after the National Board of Revenue (NBR) brought about 131,000 previously unregistered entities under the VAT system through a special nationwide drive, according to officials.
The month-long initiative was part of a targeted registration campaign designed to widen VAT coverage, improve compliance and strengthen domestic revenue mobilisation at a time when the government was seeking to reduce reliance on narrow tax sources.
As part of the effort, the revenue authority observed VAT Day on 10 December 2025, followed by VAT Week from 10 December to 15 December. The theme for VAT Day this year was “Register on time, pay VAT correctly,” which NBR officials said was intended to emphasise voluntary compliance and accurate reporting.
Building on that theme, NBR launched a special VAT registration campaign across the country from 10 December to 31 December. All 12 VAT commissionerates were instructed to carry out intensive field-level surveys and on-the-spot registration drives, including on public holidays, to identify unregistered businesses operating within the VAT threshold.
According to NBR data, the campaign exceeded its original target, resulting in the registration of about 131,000 new VAT-paying entities within a single month. Officials described the outcome as one of the most successful short-term compliance drives undertaken by the authority in recent years.
Before the interim government assumed office, the total number of VAT-registered businesses stood at around 516,000. Following the December drive, that figure has increased to approximately 775,000, marking a sharp expansion of the VAT net in a short period.
VAT remains the single largest source of government revenue among customs duty, VAT and income tax. In the last fiscal year, around 38 per cent of total revenue collections came from VAT alone, underscoring its importance to the country’s fiscal framework, NBR officials said.
The revenue authority expects VAT collections to rise further if the expanded tax base is maintained and supported by continued enforcement and compliance-focused measures. Officials said the December results demonstrate that a significant number of businesses had remained outside the formal VAT system despite meeting eligibility criteria.
To reinforce the compliance drive, the government has amended existing VAT legislation. Under the revised provisions, businesses with an annual turnover exceeding Tk50 lakh are now required to register for VAT. This replaces the previous threshold of Tk30 million, substantially lowering the entry point and bringing a wider segment of small and medium-sized enterprises into the tax net.
NBR officials said the revised threshold reflects the need to broaden the tax base in line with the country’s growing economy, while also creating a more level playing field between compliant and non-compliant businesses.
Alongside legal changes, the NBR has expanded digital services aimed at simplifying VAT compliance and reducing administrative burdens. Businesses can now complete VAT registration online, submit VAT returns through the eVAT system and make VAT payments electronically into the government treasury.
The authority has also introduced automated refund mechanisms that allow excess VAT credits to be transferred directly to taxpayers’ bank accounts, a move aimed at improving cash flow for compliant businesses and reducing delays that previously discouraged formal registration.
In addition, simplified VAT return formats are being developed to make compliance easier for small businesses, which often lack dedicated accounting resources. Officials said these measures are intended to shift the VAT system away from manual processes towards a more technology-driven, transparent framework.
As part of broader efforts to build a self-reliant and prosperous Bangladesh, the NBR has called on consumers, businesses, industrial entrepreneurs and the media to support the implementation of a modern VAT regime. Officials said public awareness and cooperation are essential to sustaining the gains achieved through enforcement-led campaigns.
The December registration drive is expected to serve as a model for future initiatives, with the NBR indicating that similar compliance-focused efforts could be rolled out periodically to ensure that newly established and previously informal businesses are brought into the tax system on a timely basis.
