The National Board of Revenue (NBR) has initiated steps towards data automation, aiming to implement an international-standard risk analysis system to better identify tax evaders.             

To support this effort, the revenue authority is prioritizing the collection of taxpayer data, which will be essential for applying risk management analytical tools.

“We have issued instructions to follow international risk analysis standards in identifying tax evaders,” said NBR Chairman Md Abdur Rahman Khan in a recent press briefing.

However, he stressed that obtaining accurate taxpayer data is a prerequisite for implementing these measures.

“Once we have the necessary data, we can proceed with programming the system to target appropriate cases, ensuring minimal hassle for taxpayers,” he added.

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Previously, NBR’s audit selection relied on a manual approach, raising concerns about potential bias.

“The manual system has led to questions,” the NBR chairman noted.

Traditionally, field officials reviewed tax files based on personal judgment. “We are moving away from that system; an office order has been issued to discontinue it,” he stated.

In alignment with its digital transformation efforts, the NBR has temporarily paused the selection of new tax files for audit.

Following the interim government’s formation, Md Alamgir Hossain, NBR’s member for tax audit, intelligence, and investigation, directed all field-level tax offices to suspend new audit selections until further notice, aiming to alleviate challenges under the current manual process.

Additionally, the NBR has mandated online income tax filing (e-Return) for government employees within the income tax circles of Dhaka North, Dhaka South, Gazipur, and Narayanganj City Corporation.

E-filing has also been made compulsory for employees of all scheduled banks, mobile telecom providers, and certain multinational companies, including Unilever Bangladesh, British American Tobacco Bangladesh, Marico Bangladesh, Berger Paints Bangladesh, Bata Shoe Company (Bangladesh), and Nestlé Bangladesh.

The NBR aims to simplify income tax return submissions and payments through its online platform for the 2024-2025 tax year.

The online return filing system, launched on September 9, allows taxpayers to pay through internet banking, card payments, and mobile banking, while enabling downloads of filed returns, receipts, income tax certificates, and TIN certificates. Past e-Returns can also be accessed.

The newly introduced Income Tax Act 2023 includes updated audit guidelines, sparking concerns about possible increased bureaucracy and costs. Under these guidelines, taxpayers may face multiple interrogation stages, raising fears of potential underhand dealings.

To address these issues, the NBR is developing a “Risk Management Engine” software to enhance audit transparency. This software will integrate with other government agencies, using risk factors to select tax files for audit, thereby strengthening measures against tax evasion.