Bangladesh to review 'tax evasion' by major companies

The government is facing challenges on three fronts amid external pressure, the implementation of its election manifesto, and rising fuel prices

The Bangladesh government is reviewing alleged tax evasion by major companies as it attempts to raise revenue amid the “three-sided challenge” of economic recovery amid various crises in the macro economy, the implementation of the BNP election manifesto, and rising fuel prices amid the war in the Middle East.

Highlighting these three challenges, Finance Minister Amir Khosru Mahmud Chowdhury said the National Board of Revenue (NBR), which had investigated tax evasion by industrial groups close to the Awami League during the interim government, is being reviewed.

After meeting with the NBR on Wednesday, he was asked about the progress of the investigation and whether a new drive would be conducted. Khosru said, "Everything (was discussed). It's not just about one issue.”

"There are many issues involved. Everything is being reviewed."

Once the interim government took power, the NBR's Central Intelligence Cell launched tax evasion investigations into various industrial groups including Beximco, Summit, and S Alam. The agency also collected some of these taxes.

At the end of the meeting, the finance minister spoke about the challenges of preparing the next budget.

"The economy that we inherited... The economy is in a very bad state. We have taken responsibility for the economy. From that point, we first have the issue of salvaging it. By salvaging it, we will move forward with this economy and meet the commitments we made to the people in our election manifesto. So, resource mobilisation is very important.

"If we cannot mobilise resources, how will we do these things? On the one hand, we have to salvage the economy, and on the other hand, we have to implement the manifesto that we gave to the people.

He said, “On top of that, the bigger problem now is the war in the Middle East. This is another major problem. Here, a big issue is that we have to spend extra, we have to buy fuel at an increased cost. This is on top of everything else. So it is a three-way challenge, and a very big one."

Khosru said, "We have been discussing these issues for a long time, figuring out how can we deal with these challenges through resource mobilisation.

"So there has been a detailed discussion, but we have to review it constantly, we have to fine-tune it. When everything is complete, I will let you know. Now the review is underway."

He also spoke on the government’s opinion on LDC graduation this year, saying: "That progress... that will now go to ECOSOC (the United Nations' economic and social council), and from there it will be passed in the General Assembly.

"So we'll see what happens. That process is ongoing. Until something happens, nothing can be said with absolute certainty."

The finance minister also spoke about moving from a debt-based economy to an investment-based economy to increase the tax to GDP ratio.

He said, "We don't want to print money. So if we are going to do this, we have to form a budget while keeping in mind how to attract investment by domestic and foreign investors and create employment through that process. It should be that investors can have confidence in Bangladesh. What has happened, time and again, is that we have a big problem securing investment in the long term.

"If investors come in after a policy is formulated and it changes, it sends the wrong message. So we don't want to do that. We want the policies we implement to have a proper time frame, so that investors can make their own calculations and invest accordingly. So that they have assurance. If there is no confidence, no one will invest, either from home or abroad."

NBR Chairman Abdur Rahman Khan and income tax, VAT and Customs officials were present at the meeting.