Many high-end cars hidden out of tax return

Nearly half of Bangladesh's luxury-car owners hide out their vehicle ownerships from tax returns, allegedly evading state revenue in one of many tricks of tax-dodging.

Among the non-disclosures, nearly 40 per cent of the luxury cars owned by large taxpayers have not been disclosed in their tax files.

Some 123 luxury cars, own by taxpayers under the Large Taxpayers Unit (LTU), remained undisclosed, out of 309.

A recent investigation by the Central Intelligence Cell (CIC) of the National Board of Revenue (NBR) uncovered the alarming cover-ups.

Tax sleuths suspect existence of black or undisclosed money in purchasing the vehicles and moved to reopen the tax files of the individuals and companies who concealed the assets in tax files.

The CIC's latest report shows that a total of 5,288 luxury cars, above 3000 cc, valued above Tk 10 million each, are registered with Bangladesh Road Transport Authority.

The tax intelligence conducted the investigation to net the well-offs evading taxes by hiding their assets from tax returns. Past five tax years' data, until February 2025, of luxury-car owners have been collected from BRTA.

Of the cars, information of 1,339 luxury cars has not been shown in the tax returns of the car owners.

The CIC found only data of 2,719 of the luxury cars furnished in the tax returns of the taxpayers in 41 income- tax circles across the country.

However, some 409 of luxury vehicle owners do not submit tax returns. Ownerships of 442 cars have been transferred.

The CIC has found the necessity of reinvestigating tax- return-submission issues of 188 luxury cars.

Also, 148 luxury cars were purchased or procured last year and the owners are supposed to show the information in the tax returns for FY2025-26.

The CIC has reconciled data of the BRTA and income-tax returns to figure out how many taxpayers have luxury cars and whether they are showing that in their tax returns.

Sources at the CIC said the NBR high-ups instructed the field-level tax offices to reopen the tax files of the luxury- car owners who did not furnish the asset in their tax returns.

Data available with the cell show around 1335 Toyota, above 3000 CC, 1227 BMW, 774 Mercedes, 695 Jeep, 508 land rover, 486 Audi, 219 Range Rover, Porsche 81, Jaguar 71, Bentley 29, Rolls Royce 25, Cadillac 17, Maserati, Tesla five, Ferrari four and Lamborghini one. As per income-tax law, owners of the private vehicles are required to pay advance taxes at the time of registration and fitness renewal of motor car.

Tax officials have said they are investigating whether the car owners, corporate or individual, have updated their fitness certificate by paying advance taxes.

Owners of private motor vehicles, up to 1500 CC, require paying Tk 25,000 in advance income tax.

However, high AIT is levied on the luxury vehicles, amounting up to Tk 0.2 million.

Senior research fellow of the Centre for Policy Dialogue (CPD) Towfiqul Islam Khan says integration of the taxpayers' asset ownership with the Taxpayer Identification number is necessary to check such anomalies.

He suggests that the government should make compliance easier to facilitate honest taxpayers and check tax-evaders.

"We have now electronic TIN and National Identification card which can be linked to the income-tax returns so that taxpayers can get all major assets' information easily," he told the FE writer.

"Without comprehensive digitisation, the efforts to explore on halfhearted low-hanging fruits would prove futile as earlier," he added.

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