NBR to fully automate VAT, income tax refunds

The National Board of Revenue (NBR) is moving to fully automate value-added tax (VAT) and income tax refunds to make the process faster, more transparent, and less burdensome for taxpayers, NBR Chairman Md Abdur Rahman Khan said yesterday.

“Automated VAT refunds have already been introduced, and income tax refunds will follow the same path,” Khan said at a press briefing at NBR headquarters in Agargaon, held for International Customs Day.

He acknowledged that minor glitches might occur initially, saying such issues are inevitable when launching a new system. Similar problems were faced and resolved when e-return filing was introduced.

Refund disbursement has already started, which Khan called a “major development.” He added that automation will gradually extend to income tax refunds as well.

The main goal is to reduce direct interaction between taxpayers and officials. “The greater the distance, the greater the transparency,” Khan said.

According to him, the system would significantly reduce complaints, allow real-time tracking and ensure refunds are issued within a much shorter timeframe. If necessary, the law will be amended in the future to further strengthen the system.

Khan also said the government is working to rationalise overall tariff structure ahead of the country’s graduation from least developed country (LDC) status.

“A report on tariff transformation has been submitted to the chief adviser, including recommendations for reducing duties,” he said, adding that Bangladesh cannot maintain high tariffs after LDC graduation.

However, he said duties had been increased in some areas to protect domestic industries, while rejecting claims of frequent duty hikes.

“In the past one and a half years, we have not increased tariffs to raise revenue. Instead, in the public interest, we reduced duties on imports of rice, onions, potatoes, and soybeans,” he added.

Addressing concerns about rising fruit and import-dependent goods prices, Khan said the main reason is the sharp depreciation of the taka against the US dollar, not taxes or customs duties.

“The dollar has risen about 40 percent -- from Tk 80 to Tk 85 two years ago to around Tk 126 to Tk 127 now -- raising import costs significantly,” he said.

He added that no new duties were imposed on fruit imports during this period. “In fact, income tax on fruit imports was cut from 10 percent to 5 percent, and duties on date imports were reduced significantly,” he said.

On the planned restructuring of the NBR into two separate divisions, Khan said the matter will be finalised after a secretaries’ committee meeting.

“Once the division of responsibilities is decided, a gazette will be issued, and organograms and designations will be adjusted accordingly,” he added.

The NBR chairman also hinted at a possible extension of the January 31 deadline for individual income tax returns. “We will consider it if some registered taxpayers miss the deadline,” he said, adding that no final decision has been made.