NBR banks on tobacco, high-value litigations to boost revenue by 47%

To curb tax evasion, NBR is considering QR codes on cigarette packs and AI cameras in tobacco factories, according to an NBR official.

The National Board of Revenue has ordered a nationwide drive targeting high-yield revenue sectors, including tobacco, and the speedy disposal of major tax disputes as it seeks to raise revenue collection by nearly 47% in the fiscal 2026-27 despite concerns from field officials over the feasibility of the target.

The directives were issued at a meeting between senior NBR officials and field-level revenue officers at the revenue board’s headquarters in Agargaon yesterday (26 July), according to sources familiar with the discussions.

Field officials told the meeting that achieving the ambitious revenue target would be challenging under current economic conditions. However, the NBR leadership instructed officials to work towards meeting the goal by focusing on sectors with the highest revenue potential.

Tobacco, audits and tax disputes

According to officials who attended the meeting, the NBR decided to intensify oversight of the tobacco sector, the country’s single largest source of tax revenue, while accelerating the resolution of major revenue-related legal disputes.

The meeting also decided to expedite audits of around 66,000 income tax and VAT files that had been selected through an automated system.

An NBR VAT commissioner, speaking on condition of anonymity, told The Business Standard that discussions included introducing QR codes on cigarette packets to strengthen monitoring and installing AI-powered cameras at tobacco manufacturing facilities to curb tax evasion.

The government collects more than Tk40,000 crore in revenue annually from the tobacco sector. However, various studies have shown that a huge amount is being evaded in this sector due to counterfeit cigarettes, smuggled tobacco products and other reasons.

The official added that the NBR had identified 23 major tax-related cases involving substantial amounts of disputed revenue and would seek their early disposal. If necessary, the cases could be resolved through the Alternative Dispute Resolution mechanism following directions from the finance minister, the official said.

According to NBR sources, the 23 cases involve more than Tk50,000 crore in disputed revenue.

The commissioner said NBR Chairman Ahsan Habib has instructed officials to complete audits of the selected files promptly and intensify field-level enforcement drives to detect tax evasion.

Field concerns

Field officials also warned that a proposal to collect VAT every three months instead of monthly could negatively affect revenue collection.

The NBR asked field offices to submit within one week details of the operational challenges affecting revenue collection. The issues will be presented to the finance minister and the prime minister’s economic adviser, according to the meeting.

Officials also discussed the possibility of the prime minister meeting field-level revenue officials to boost their confidence. According to one commissioner who attended the meeting, officials were informed that the meeting could take place on 18 August.

Confidence and institutional challenges

According to NBR sources, the meeting also addressed the impact of recent institutional changes on revenue administration.

Following the fall of the Hasina government in 2024, the government’s decision to abolish the NBR and divide its functions into two separate departments triggered protests by revenue officials, who objected to the transfer of administrative authority to officers from the administration cadre.

The protests led to the temporary closure of customs houses. After the government adopted a tougher stance, at least five officials were sent into forced retirement, more than 20 were dismissed, and several hundred officials and employees were transferred as disciplinary measures, according to the sources.

The sources also said allegations of bribery and corruption against some field officials, combined with concerns over inadequate institutional support following attacks during anti-evasion operations, had weakened enforcement efforts and reduced officers’ confidence.

The meeting was also informed that Finance and Planning Minister Amir Khosru Mahmud Chowdhury and Prime Minister’s Economic Adviser Rashed Al Mahmud Titumir would work from the NBR headquarters one day each week to strengthen oversight of the revenue authority’s activities.