The National Board of Revenue (NBR) is actively pursuing direct access to taxpayers' bank account information from the Bangladesh Bank as a measure to combat tax evasion.
This would give the revenue authority simplified access to the banking details of taxpayers and traders, which will help them monitor money flow.
Economists, business professionals, and even former NBR professionals have voiced concerns, contending that granting unrestricted access to all bank accounts would infringe upon the principles of confidentiality and the Bank Secrecy Act
The VAT online project office is collaborating with the central bank for this initiative, with the latter making necessary preparations, sources at NBR said.
Kazi Mostafizur Rahman, project director of VAT Online Project told Dhaka Tribune that some preparatory work has to be done before the start of this program, and Bangladesh Bank is developing it. It is expected to be launched in December.
However, the former chairman of the revenue board does not agree with the idea of NBR.
Muhammad Abdul Mazid said that a bank account is the confidential information of an individual or organization, which is also recognized in banking law. If NBR or tax officials get access to everyone's account - it will be against the principle of confidentiality.
Businesses also say that giving NBR direct access to bank account information will create fear among people. As a result, bank transactions may decrease.
Economists also say it is a wrong policy.
Ahsan H Mansur, executive director of the Policy Research Institute (PRI) told Dhaka Tribune: “I think this is a completely wrong policy. Because no other country requires taxpayers to provide so many documents as Bangladesh. Here everything is in the bank statement which is given by the taxpayer every year. Seeking access to everyone's bank account is a violation under the Bank Secrecy Act.”
“However, NBR can inspect the bank accounts of some individuals or any instructions in special cases subject to the permission of the court if they need it. Therefore, I think it would not be right to give them full access,” the former IMF economist added.
However, Bangladesh Bank refuses to make any official comment on this.
NBR informed that, when completed, it would not be necessary to request the information from banks, as the revenue board would be able to directly access the data with permission from the central bank.
In this case, the central bank will give special approval to VAT commissioners and there will be a strict login system.
This access will be available through a secured password, OTP.
The NBR is in the process of implementing the medium and long-term revenue strategy, which also includes the issue of revenue administration's access to bank-held taxpayer information.
The committee established to formulate the revenue strategy presented its draft on August 24 in an event where the NBR chairman was present.
According to data from the Bangladesh Bank, the number of bank accounts in the country was 136.2 million by last December, with total deposits approximating Tk160,000 crore.
Among these, about 110,000 accounts witnessed transactions exceeding Tk1 crore.
As per NBR's VAT Online Project Office, there are 457,000 business identification number (BIN) holders, out of which over 300,000 filed tax returns in the previous month.
The NBR's data reveal stagnation in the tax-to-GDP ratio over recent years.
The ratio declined to 8.7% in fiscal 2021-22, the lowest in South Asia.
Nonetheless, the government aims to elevate this ratio to 12.3% by 2025 as per the ‘8th Five-Year Plan.’
The NBR is actively devising medium and long-term revenue strategies to fulfill these goals.
Although its finalization, initially set for March of this year, was delayed, insiders predict completion by December.
The draft revenue strategy is expected to be finalized within this year based on feedback from stakeholders and think tanks.