The National Board of Revenue (NBR) is contemplating the introduction of a system to hold its officers accountable for failing to enlist business entities under the Value Added Tax (VAT) net.
To implement this plan, amendments to the existing VAT law will be necessary.
The revenue authority is aiming to bring all business entities with an annual turnover of Tk50 lakh or more under the VAT net. This threshold was reduced from Tk3 crore in January.
Currently, the NBR is under significant pressure from the International Monetary Fund (IMF) to enhance revenue collection and raise the tax-to-GDP ratio to 7.9% by June next year, up from the current 7.4%.
The IMF has withheld the release of the third and fourth tranches of its $4.7 billion loan program, demanding that the government fulfill all stipulated conditions.
As part of these conditions, the IMF has asked the NBR to collect approximately Tk2 lakh crore during the remaining months of the 2024–25 fiscal year.
Speaking to a reporter this week, a senior NBR official said that although it might take time, the envisioned system should ensure that if a VAT officer visits a location, every shop in that area is brought under the VAT net.
Referring to the revised threshold, the official explained that with the yearly VAT turnover limit now at Tk50 lakh, any shop selling goods worth just Tk15,000 per day qualifies for VAT registration.
“There is no need to ask shop owners whether they reach this threshold. Every shop should be under the VAT net. There should be combing drives in each area, regardless of size,” the official said on condition of anonymity.
He further said that the NBR plans to implement this policy without any discrimination.
“We are considering changes to the relevant laws to make VAT officials accountable for excluding any shop from the VAT net in their designated area,” he said.
The official emphasized that if any business entity is skipped, the officer responsible for that region would be held liable.
When asked about the shortage of manpower, the NBR official acknowledged the challenge but affirmed their commitment.
“If necessary, we’ll take more time. But no business entity should be left out of the VAT net. If required, we’ll begin with smaller areas,” he said.
NBR Chairman Md Abdur Rahman Khan, speaking at a recent pre-budget meeting, said that the annual turnover threshold was deliberately lowered to bring all business entities under VAT coverage.
“We want to expand the VAT net. We’ve already started working on this. Our goal is to ensure 100% coverage in specific areas—no one will be excluded,” he said.
As of February 2025, the NBR has collected Tk50,844 crore against a target of Tk69,103 crore.
By comparison, it had collected Tk53,426 crore during the same period in February 2024, reflecting a negative growth rate of 4.83%.
