The incumbent BNP government's revenue collection target of a record Tk 6.04 trillion for this fiscal as spelt out in the national budget for FY (2026-27) is no doubt a challenging proposition. That is so because, as told by the finance minister Amir Khosru Mahmud Chowdhury in parliament recently, the tax regulator, NBR, could only achieve 81.60 per cent of revenue target set for the last fiscal (FY26). In that case, fulfilling a far higher revenue target for FY27 and that, too, with the same old tax-collection setup that failed to reach the target on a number of occasions in the past might sound rather highly demanding as well as ambitious. Understandably, to meet this unprecedented increase in revenue target, compared with the previous year's, the government is pushing structural reforms, establishing special revenue taskforces, and so on.
Alongside the massive overhaul of the tax administration as promised, the government's strategy also focuses on technology-driven tax tracking. The core plan is to track high-income individuals and corporate entities. To this end, as part of its database integration, the NBR is linking its tax records with real-time data from external institutions, including banking networks, land registration offices and vehicle registration authorities, to identify undeclared wealth. In a similar vein, under its 'e-audits' and 'e-returns' plan, the government is shifting away from the manual, discretionary tracking by ensuring fully functional online return filing and electronic audit systems. Using the integrated databases, the authorities are specifically targeting owners of luxury vehicles and large businesses that show operating losses while maintaining high-value assets. Also, the government's 'risk-based audit' as introduced by the NBR involves an automated, data-driven framework to monitor and inspect businesses. Through this approach, rather than randomly selecting businesses or subjecting them to arbitrary, repeated manual checks, the system uses predefined risk indicators and algorithms to identify firms with a higher probability of tax evasion. The system promises to eliminate discretionary human bias and aims to reduce harassment of compliant businesses while heavily targeting suspected revenue leakages.
In fact, this is part of the present administration's progressive taxation goal, in which the budget shifts the tax burden towards the high-earning individuals with plans for higher tax slabs on the ultra-rich taxpayers. At the same time, the tax regulator, NBR, is also trying to relieve low-income taxpayers by raising the general tax-free income threshold to Tk 0.4 million, retaining a low Tk 1,000 minimum tax for first-time return filers, and introducing simplified area-based flat-rate taxes to formalise new earners without aggressive return audits. In a tech-driven world, the government's, or for that matter the revenue regulator, NBR's choice of technology over the prevailing manual and discretionary system of tax collection is definitely a well-timed as well as a welcome one, especially when it aims to bring the perennial tax-evaders, a section of the ultra-rich individuals as well as businesses under the tax net. But just a word of caution -- technology is ubiquitous and the ultra-rich tax-dodgers can also use the entire exercise of tech-based tracking to their advantage.
So, again, there is no alternative to creating a dedicated set of people to run even the automated tax administration who would not compromise their professional integrity under any circumstances. However, as long as the tax administration is not implementing its promise of separating the NBR's policy wing from its enforcement branch, the inherent human bias of the system will remain. Notably, the global lenders, IMF and the World Bank (WB), too, have long been advising the government to effect the structural overhaul for elimination of the conflict of interest within the tax regulatory system. Hopefully, the ongoing review exercise of the ordinance proclaimed to this effect by the Dr Yunus-led interim government (the ordinance has already lapsed due to the delay in passing it into a law in the current parliament) to split the NBR will be completed sooner rather than later.
