Published: 11:04 AM, 08 September 2026
Govt moves to end taxpayers’ fear, overhaul tax system: Khosru
Finance Minister Amir Khosru Mahmud Chowdhury has said the government is taking a series of measures to simplify Bangladesh’s tax system, enhance transparency and reduce taxpayers’ fear of audits and harassment, with the aim of encouraging more people to voluntarily come under the tax net.
Replying to a supplementary question from opposition lawmaker Md Abdul Alim of Bagerhat-4 in the Jatiya Sangsad on Sunday, the finance minister acknowledged that a widespread fear exists among taxpayers that filing a tax return—particularly a revised return—could trigger an audit and lead to unnecessary complications or harassment.
“It is certainly true that there is a fear of coming under the tax net in the country,” Khosru said, stressing that addressing this fear is essential to expanding tax compliance and improving revenue mobilisation.
The minister said the government has already begun work on simplifying the overall taxation process so that citizens can pay taxes willingly rather than viewing the tax system as a source of anxiety.
“The fear exists for various reasons. That is why people do not want to come under the tax net,” he said.
According to Khosru, the government’s reform efforts are not limited to the audit process. Rather, it is examining a broader range of institutional and procedural barriers that discourage taxpayers from complying with tax requirements.
He said the government is moving towards a major structural reform within the National Board of Revenue (NBR), separating tax policy formulation from tax administration and implementation.
“We are first moving towards bifurcation of the tax system—those who will formulate tax laws and policies and those who will implement them,” he said.
The finance minister described the proposed separation as an important step towards improving the effectiveness and integrity of tax administration. At present, the combination of policy-making and implementation functions has created opportunities for undue influence, he suggested.
“This was a major area of opportunity for corruption, and this influence will be reduced to a great extent through the separation,” Khosru said.
The proposed bifurcation is expected to create clearer institutional responsibilities, with one side focusing on developing tax policies and laws while the other concentrates on their administration and enforcement. The government believes such a separation can help make the tax system more predictable and reduce opportunities for discretionary intervention.
Khosru also emphasised the need to establish greater transparency in the implementation of tax rules. He said taxpayers should be able to understand their obligations clearly and fulfil them without unnecessary complications or fear.
“We are trying to bring complete transparency into the implementation process so that every taxpayer can come forward easily to pay taxes,” he said.
The minister’s remarks came against the backdrop of Bangladesh’s long standing challenge of raising domestic revenue. Despite the size and growth of the economy, the country’s tax-to-GDP ratio remains comparatively low, limiting the government’s ability to finance public services, infrastructure, social protection and development programmes from domestic resources.
“Our tax-to-GDP ratio is very low. Bangladesh has fallen far behind because these efforts did not continue in the past,” Khosru said.
He argued that simply increasing pressure on existing taxpayers would not be sufficient to address the revenue challenge. Instead, the government needs to broaden the tax base by making compliance easier and creating an environment in which more individuals and businesses are willing to register and pay taxes.
“The more we simplify the system, the more people will come forward,” he said. The finance minister indicated that reducing taxpayers’ fear would therefore be an important component of the government’s broader revenue reform agenda. A simpler and more transparent system, he said, would help build confidence between taxpayers and the tax administration.
Khosru said the government wants to address such concerns while maintaining the necessary mechanisms for tax enforcement.
He made it clear that audit-related problems represent only one part of a much wider set of obstacles within the existing system. The government is therefore working to address the problems collectively rather than focusing on a single aspect of taxation.
“We are working to simplify the system by addressing all these problems together. Inshallah, you will see the results very soon,” he said.
The proposed reforms could have wider implications for Bangladesh’s fiscal management if successfully implemented. A broader and more voluntary tax base would allow the government to increase revenue without relying solely on higher tax rates or imposing additional burdens on existing compliant taxpayers.
Economists and businesses have frequently stressed the importance of making the tax system simpler, more predictable and less costly to comply with. Greater transparency could also reduce disputes between taxpayers and tax officials and improve confidence in the revenue authority.
The government’s planned separation of tax policy from tax administration is consequently being viewed as a potentially significant institutional reform. By clearly distinguishing between those responsible for making tax rules and those responsible for implementing them, the government expects to reduce conflicts of interest, discretionary intervention and opportunities for corruption.
If the planned reforms are implemented effectively, the government expects them to help broaden the tax base, improve compliance, strengthen revenue collection and gradually raise Bangladesh’s tax-to-GDP ratio.
For taxpayers, however, the success of the reform will ultimately depend on whether the promised transparency and simplification are reflected in their day-to-day dealings with tax authorities.
Khosru said the government is working to ensure that outcome, signalling that tax reform will focus not only on collecting more revenue but also on changing the relationship between taxpayers and the tax administration.
