The National Board of Revenue’s (NBR) latest push to develop a specialized app to collect a 0.2% advance tax -- deducting Tk2 per thousand on goods supplied via distributors starting next January is yet another display of the National Board of Revenue’s (NBR) reactive decision making.
While bringing informal businesses into the formal tax net and digitizing transactions are sound principles in theory, the timing and execution of this move expose a deeply flawed administrative mindset.
That NBR is already facing a staggering revenue shortfall exceeding Tk50,000 crore in just the first four months of FY27 brings to light all we need to know about the institution’s inability to set realistic targets.
Moreover, the tax authority is once again taking the path of least resistance: Potentially squeezing small, vulnerable shopkeepers because it lacks the competence and political will to collect from the wealthy elite.
For years, the NBR and the Ministry of Finance have indulged in the annual farce of setting wildly unrealistic, inflated revenue targets disconnected from ground realities. When those projections inevitably collapse, the agency panics and unleashes predatory compliance burdens on the smallest economic actors.
Instead of dismantling entrenched tax evasion among the powerful and wealthy, be they corporate conglomerates or individuals, they continue targeting individual middle class employees and the millions of small retail traders who are already battling sluggish sales and relentless inflation.
Expecting a corner shop owner to maintain five separate VAT registers, hire accountants, and absorb advance tax deductions is administrative harassment disguised as reform. Inevitably, these compounding compliance costs then get passed directly onto struggling consumers through higher retail prices.
It is unacceptable that taxpayers continue to pay the price for chronic regulatory incompetence without any repercussions for the officials responsible for perpetual revenue failures.
If we want true fiscal reform, then we must be setting realistic targets, automating collection from high-income tax evaders, and holding NBR leadership accountable for its systemic collection failures every year.
