NBR eyes AI to identify taxpayers, curb evasion

The National Board of Revenue (NBR) plans to use artificial intelligence (AI) to identify potential taxpayers as part of efforts to expand the tax net, increase income tax return filing and curb tax evasion.

The plan includes integrating data on national identity cards (NIDs), bank accounts, land and flats, vehicles, savings certificates and overseas travel with the NBR’s database.

As part of the initiative, the NBR also plans to cross-check Bangladesh Road Transport Authority (BRTA) data with taxpayers’ income tax records, with a particular focus on owners of luxury and expensive vehicles.

Tax officials will examine whether such vehicle owners regularly file income tax returns and whether the value of their vehicles is consistent with their declared income and assets.

The measures were discussed at a high-level government meeting involving the NBR on Sunday, according to NBR sources.

An official involved in the meeting said AI would be used to identify potential taxpayers by integrating data from various government agencies and financial institutions.

The system would also allow the NBR to cross-check information provided in individual income tax returns against records of bank accounts, land and flats, vehicles, savings certificates and overseas travel.

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Officials believe the approach will make it easier to detect undeclared income and assets or discrepancies between taxpayers’ declared financial status and their actual wealth.

Under the initiative targeting luxury vehicle owners, BRTA data would be integrated with income tax records to flag potential discrepancies.

If an individual owns an expensive vehicle but does not file an income tax return, or if the vehicle’s value appears inconsistent with the income and assets declared in the return, the case could be flagged for scrutiny by tax officials.

The meeting also discussed revenue collection, the tax-to-GDP ratio, expansion of the tax base, the NBR’s organisational capacity, customs and VAT management, and the use of data-driven measures to combat tax evasion.

The NBR collected Tk4.15 lakh crore in revenue in the fiscal 2025-26. Revenue collection has increased around 20.6-fold over the past 25 years.

For FY27, the NBR has been given a revenue collection target of Tk604,000 crore, equivalent to 64.4% of total budget expenditure and 86.9% of the government’s total revenue target.

Around 13 million individuals currently have tax identification numbers (TINs), but only 4.7 million file income tax returns, leaving a large gap between TIN registration and return filing.

According to NBR data, fewer than 2% of taxpayers are currently selected for risk-based audits.

Since FY24, taxpayers have been selected for such audits through a machine-based system aimed at reducing the scope for discretionary selection by tax officials.