Homegrown software powers Bangladesh's first fully digital tax return cycle

Bangladesh has achieved a major milestone in its digital transformation journey, with more than 5 million income tax returns submitted online through a locally developed e-Return platform, marking the country’s first fully digital tax return cycle for individual taxpayers.

The platform, developed by Synesis IT Ltd. for the National Board of Revenue (NBR), has fundamentally transformed a process that for decades was associated with long queues, paperwork, repeated visits to tax offices and administrative delays. Today, taxpayers can complete the entire filing process from a computer or smartphone within minutes and instantly receive digital acknowledgement receipts and tax certificates.

The achievement follows the government’s decision to make online filing mandatory for individual taxpayers from the 2025-26 tax year. According to official figures, the system processed more than 5 million returns this year, involving tax payments of nearly Tk 200 billion.

Beyond its immediate impact on taxpayers, the success of the platform is increasingly being viewed as a significant demonstration of Bangladesh’s growing capability to build and manage large-scale digital public infrastructure using local expertise.

From unsuccessful foreign projects to a local success story

Bangladesh’s efforts to modernise tax administration did not begin with the e-Return platform. Over the past decade, several initiatives involving foreign consultants and international technology providers were undertaken to digitise tax services.

Despite substantial expenditure running into hundreds of crores of taka, many of those projects failed to deliver a fully functional and scalable solution. Industry observers attribute the shortcomings to difficulties in adapting foreign systems to Bangladesh’s tax structure, administrative realities and user requirements.

The Covid-19 pandemic further exposed the limitations of paper-based tax administration when physical access to tax offices became restricted, underscoring the need for a robust digital alternative.

Against that backdrop, the NBR adopted a different strategy, engaging local technology expertise under a revenue modernisation initiative supported by the European Union. Synesis IT subsequently developed a scalable and user-friendly e-Return platform that has now become the backbone of the country’s digital tax filing system.

Rapid adoption by taxpayers

The platform’s growth has been remarkable. According to NBR data, online return submissions rose from 527,000 in the 2023-24 tax year to 1.712 million in 2024-25, representing growth of nearly 225 per cent within a single year.

More than 2.165 million taxpayers are currently registered on the platform, while the overall number of citizens benefiting from the service has exceeded 6.5 million.

The system allows users to complete returns through the NBR’s online tax portal using their Taxpayer Identification Number (TIN) and registered mobile number. It supports both desktop and mobile devices and has been designed to accommodate users with varying levels of digital literacy.

Taxpayers can enter information relating to income, investments, savings instruments, assets, liabilities and expenditures before submitting returns electronically and receiving instant confirmation.

Transparency, efficiency and trust

Speaking about the broader impact of digitalisation on tax administration, NBR Chairman Md Abdur Rahman Khan said technology has significantly improved transparency and accountability.

“Software and machines are completely impartial. Whatever command you give them, they deliver accordingly. As a result, irregularities and tax evasion become much easier to detect and trace,” he said.

The NBR chief argued that digital systems leave little room for manipulation.

“When all records are stored digitally and online, there is no opportunity for tampering. Nobody can alter those records. That means transparency is effectively ensured.”

Mr Khan said digitisation is also helping to strengthen trust between taxpayers and the tax authority.

He revealed that the NBR plans to introduce online tax refunds from next year through the e-Return system.

“We want to strengthen the relationship of trust between taxpayers and the revenue administration. There is a perception that the tax authority only collects revenue and never returns money. We want to change that perception by introducing a refund mechanism through the digital platform,” he said.

Local developers outperforming foreign consultants

Mr Khan said Bangladesh’s experience demonstrates the value of investing in domestic technological capability.

“One of the largest automated systems in Bangladesh’s public sector is iBAS++, and it has been built and maintained by our own professionals,” he said.

He noted that previous attempts to drive digital transformation through foreign consultants had not produced satisfactory outcomes.

“We previously attempted digital conversion projects through foreign consultants. Ultimately, those initiatives had to be abandoned because they were not successful.”

According to him, local software developers possess significant advantages because they better understand the country’s operational realities and can respond quickly to evolving requirements.

“The greatest advantage of working with our own software developers is that they are always accessible. Communication is easier, and they understand our needs and challenges much better.”

He also expressed confidence in the country’s technology talent.

“We do not have any shortage of talent. Our software engineers are producing excellent results in different parts of the world, and we have achieved very positive outcomes through their work.”

Mr Khan added that stronger policy support could help Bangladeshi technology companies expand internationally.

“If regulators provide the necessary support, our IT companies will not only be able to meet domestic requirements but also compete more effectively in global markets.”

From fear-based compliance to incentive-based taxation

Commenting on the implications of the digital tax transformation, Dr Khaled Mahmud said technological success alone would not be sufficient to broaden the country’s tax base.

He argued that Bangladesh should gradually move away from a tax culture driven primarily by fear of penalties and instead focus on encouraging voluntary compliance through incentives and improved services.

“At present, what largely drives tax payment is the fear factor,” he said. “The government’s objective should be to move away from fear and instead present tax compliance as something associated with benefits and rewards.”

Dr Mahmud suggested introducing service-based incentives for compliant taxpayers.

“If taxpayers are categorised according to their compliance and provided with certain services or privileges, people will become more motivated to pay taxes voluntarily.”

He believes such incentives could help create a stronger culture of voluntary compliance while improving relationships between taxpayers and the state.

The IBA professor also emphasised the need for public communication and awareness campaigns.

“The government should actively market these services. Why should there not be a dedicated budget to educate citizens and help them understand the value and benefits of tax compliance?” he said.

According to him, digital tax platforms should be accompanied by efforts to improve public understanding of how taxation contributes to national development and service delivery.

Digital sovereignty and the power of local innovation

For Synesis IT, the successful implementation of the e-Return platform represents more than a technological achievement; it is evidence that Bangladesh can develop strategic national systems using domestic expertise.

Aminul Bari Shubro, Chief Solution Officer of Synesis IT Ltd., said one of the most important challenges in digital transformation is ensuring citizen-centric services while safeguarding national data and technological independence.

“The success of the e-Return platform demonstrates that solutions developed by local experts are not only effective but also strategically more sustainable and secure,” he said.

According to him, local developers possess a critical advantage in understanding the country’s legal framework, language, administrative structures and user behaviour.

“The greatest strength of domestic technology is what we call contextual intelligence. Local developers understand the country’s laws, governance systems, operational realities and citizens’ needs. This enables them to design solutions that are more adaptable, user-friendly and responsive.”

Mr Shubro noted that platforms such as e-Return require constant adjustments in response to policy changes and evolving taxpayer requirements, something that local teams are often better positioned to manage.

He also stressed the importance of data sovereignty.

“Tax records and financial information constitute some of the most sensitive national data assets. Using domestic technology helps ensure greater control over data sovereignty, cyber security and long-term operational resilience.”

The Synesis IT executive said the success of the project demonstrated that Bangladesh was no longer merely a consumer of technology.

“This experience shows that Bangladesh is capable of building and operating complex digital public platforms at a national scale. It proves that we are not only users of technology but also creators of critical digital infrastructure.”

He argued that the lessons learned from the e-Return project could be applied to other national initiatives, including digital identity systems, social protection programmes, e-governance platforms, healthcare services, education technology and digital payment ecosystems.

Towards a fully digital tax ecosystem

Officials say the current success is only the beginning of a broader transformation within tax administration.

Plans are under way to incorporate corporate tax returns into the platform and introduce digital audit systems, online verification processes, smart office management tools, document tracking systems and performance monitoring mechanisms.

Once integrated, these components are expected to create a comprehensive digital tax ecosystem capable of supporting taxpayers, auditors and administrators through a unified digital platform.

Experts believe the transformation could eventually position Bangladesh among South Asia’s most advanced digital tax administrations while serving as a powerful example of how local innovation can solve complex governance challenges.

For many observers, the e-Return platform represents more than a successful software project. It is a story of institutional reform, technological self-reliance and growing confidence in Bangladesh’s ability to build and manage critical digital infrastructure using its own talent and expertise.