The National Board of Revenue (NBR) Chairman, Md Abdur Rahman Khan, announced today that the government aims to implement a single-rate VAT system to minimize revenue collection leaks.
“It would be beneficial for us to introduce a single-rate VAT to reduce revenue leaks, and it would also simplify administration. We will certainly work towards that,” he said during a press conference held at the NBR headquarters in Dhaka to mark VAT Day 2024.
The theme for this year’s VAT Day is “We all will pay VAT and contribute to development.”
Rahman noted that the NBR plans to gradually phase out VAT exemptions to improve collection. “This doesn’t mean it will happen immediately; we’ll do it in consultation with stakeholders,” he clarified.
He emphasized expanding the VAT net and including those currently outside it. “We need to grow our tax base as quickly as possible. Expanding the VAT net will help reduce the revenue shortfall seen in the first five months of the current fiscal year,” he added.
Rahman acknowledged the country’s challenging economic situation. “If we are to overcome this and move forward, we have no alternative,” he remarked.
He urged VAT officials to act with honesty and integrity, noting that tax waivers granted for public welfare have impacted revenue collection. “To stabilize revenue, there is no choice but to reduce tax waivers,” he added.
The chairman mentioned that as the economy improves, efforts must be made to boost revenue. “We’re working toward rationalizing tax waivers. Some Special Regulatory Orders (SROs) have already been removed, and more are under review,” he said.
He stressed the need to end the culture of tax exemptions, stating, “Without this change, we cannot increase revenue collection.”
Rahman outlined steps to modernize the VAT system, including full online integration for VAT services. “We are transitioning from paper to online systems, simplifying VAT registration, filing, and payments. Automation is being implemented at every stage,” he said.
He highlighted the introduction of an e-invoice system to create a seamless VAT process.
As the Secretary of the Internal Resources Division (IRD), Rahman also mentioned initiatives like reducing VAT on essentials such as sugar, eggs, potatoes, and edible oil, and eliminating excise duty on Hajj passenger tickets.
He reiterated the NBR’s commitment to fostering a business-friendly environment, promoting timely reforms, and engaging stakeholders to create an equitable tax culture in Bangladesh.
“The success of the VAT system relies on active participation from all stakeholders. We believe these initiatives will help build a robust tax culture, ultimately increasing VAT collection,” he said.
Rahman concluded by expressing hope for a prosperous future. “Through these efforts, we will become a happy, beautiful, and prosperous nation,” he said.
