NBR adopts 3-R strategy to harness revenue collection

National Board of Revenue (NBR) has framed a 3-R (Recovery, Restoration and Reconstruction) strategy to harness revenue collection by overcoming the existing challenges.

Under the strategy, investment in tax administration, skill development, system interoperability, risk management, taxpayer service, technology and compliance would act as catalysts in harnessing the realization of challenging revenue collection target by the NBR in the 2027 fiscal year, according to a NBR presentation before the members of the parliamentary Standing Committee on the Ministry of Finance last month.

Under Recovery, the strategy aims to achieve an average 16% growth in revenue collection, Restoration focuses on expanding the tax net and creating a business-friendly revenue environment while reconstruction seeks to accelerate revenue collection through greater transparency and voluntary compliance.

The NBR made detailed presentations on its capacity to meet government expenditure requirements, measures taken to narrow the Tax-GDP gap, and assessment of the NBR’s organisational structure and necessary measures.

To materialise the goal of realizing Tk6,04,000 crore revenues in the FY27 by the NBR, the revenue board has also highlighted various sources from which it would collect the required revenues.

Of the total target, the Income Tax Wing has been assigned to fetch Tk2,23,480 crore, the VAT wing Tk2,23,480 crore and the Customs wing Tk1,57,040 crore.

“The NBR expects the combined measures across income tax, VAT and customs administration to help achieve the Tk6,04,000-crore revenue target for FY27,” a senior NBR official told BSS.

Overall, the revenue projection shows that the income tax authorities plan to raise collection through a combination of revenue growth, stronger action against tax evasion, broader withholding-tax coverage, changes in individual taxation and investment rebates, taxation of capital gains, enhanced compliance requirements and improved tax-case disposal.

For the Income Tax Wing, the authorities plan to mobilise revenue through regular growth, recovery of evaded taxes and a range of policy and administrative measures.

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Income tax and travel tax collection stood at Tk1,45,588 crore in FY2025-26. The authorities expect an additional Tk14,558 crore from 10% regular growth in FY2026-27.

The projection also includes Tk3,000 crore from recovering evaded taxes through the central intelligence cell, income tax intelligence, IIC and tax circles, while Tk1,000 crore is expected from faster disposal of tax cases arising from audits and reopening of cases under Section 212. Another Tk500 crore is projected from facilitating taxpayers to submit delayed returns voluntarily.

Among policy measures, the authorities expect Tk3,000 crore from replacing the 5% tax rate for individual taxpayers with a progressive rate of up to 30%. Another Tk1,000 crore is projected from reducing the investment-related tax rebate from 15% to 10% and lowering the maximum rebate from Tk10 lakh to Tk7.5 lakh.

The introduction of turnover tax for taxpayers across all business categories is expected to generate another Tk1,000 crore, while requiring business taxpayers to submit audited financial statements and computation sheets with their returns is projected to yield Tk500 crore.

A major measure is the collection of withholding tax from retailers under the business-to-business model, projected to generate Tk7,000 crore.

The authorities also expect Tk4,000 crore from introducing IFRS-15 in the accounting practices of real-estate developers and another Tk4,000 crore from taxing capital gains from the sale of land, flats and other capital assets at regular rates.

For the VAT wing, the projection is based on regular growth and additional revenue mobilisation measures. The division collected Tk1,56,069 crore in FY2025-26 and expects Tk15,607 crore from 10% regular growth.

It also expects Tk15,000 crore from higher ADP implementation and Tk12,000 crore from the tobacco sector, including biri and cigarettes. Another Tk2,500 crore is projected through measures against illegal cigarettes.

The VAT authorities are also focusing on audits, arrears recovery, expansion of VAT registration, monitoring of high-risk establishments and minimising compliance gaps. They aim to dispose  50% of pending cases by December 2026 and at least 95% of unresolved cases during FY2026-27.

Meanwhile, the Customs wing has projected Tk1,57,040 crore revenue in FY27 against Tk1,11,623 crore collected in FY26.

The Customs projection includes Tk11,577 crore from normal growth and Tk3,500 crore from FY27 budgetary measures. Additional mobilisation is expected through arrears recovery, intelligence and preventive operations, post-clearance audits, auctions, proper classification and valuation of imports, prevention of misuse of bonded facilities and recovery of deferred payments.

The Customs wing expects Tk500 crore from post-clearance audits, Tk500 crore from auctions, Tk400 crore from proper classification and valuation of imported goods, Tk1,800 crore from preventing misuse of bonded facilities and Tk140 crore from recovering deferred payments.