The National Board of Revenue (NBR) has launched a nationwide investigation into contractors handling government development projects to verify their value-added tax (VAT) and income tax payments.
The probe, conducted by the NBR’s Central Intelligence Cell (CIC), is gathering data on active projects and the firms executing them. Agencies in roads, railways, health, education, and other sectors have been asked to submit relevant details.
Contractors’ tax records under scrutiny
The CIC recently requested information from the Roads and Highways Department (RHD) about all ongoing projects. The demand included project names, development partners, contractor companies, their business identification numbers (BINs) and tax identification numbers (TINs), total costs, and start dates.
A letter from the CIC mentioned confidential reports indicating contractors had failed to deposit the full amount of government revenue owed. The RHD has since directed its officials to provide the requested data without delay.
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Under Section 82 of the Value Added Tax and Supplementary Duty Act, 2012, the CIC has the authority to require cooperation. The collected data will allow the NBR to compare government payments to contractors against the VAT and income tax those firms actually paid.
For each project, the CIC also requested details on the funding source, whether from government funds, foreign assistance, or other channels. An official from the unit, speaking anonymously, stated the information would show how much money individual contractors received and the corresponding tax payments.
Should discrepancies emerge, the NBR may pursue legal action against the firms involved.
Pressure to boost revenue amid shortfalls
Bangladesh is under increasing pressure to strengthen revenue collection.
The investigation seeks to build a detailed, project-level view of contractors’ earnings, tax registrations, and payments. Officials want to confirm whether the government is receiving the full revenue owed from its development expenditures.
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Dr. Iftekharuzzaman, executive director of Transparency International Bangladesh, described the NBR’s effort as necessary but long overdue. While supporting the initiative, he raised concerns about whether the agency would address potential collusion between contractors and corrupt NBR staff if such issues surfaced.
The CIC has extended its data collection beyond roads. Similar requests have been sent to the ministries of education, health, local government, railways, shipping, water resources, and housing and public works, along with the Local Government Engineering Department (LGED) and Bangladesh Railway.
A significant share of the government’s development budget is spent on roads, bridges, railways, local infrastructure, and waterways.
The NBR’s immediate priority is compiling the data. Next steps will depend on the findings.