NBR seeks contractor data to plug revenue leakage in govt projects

The National Board of Revenue (NBR) has launched a major investigation into whether contractors implementing government development projects are properly paying value-added tax (VAT) and income tax.

The investigation aims to determine whether the government is receiving the revenue it is entitled to from large-scale public spending.

As part of the probe, the NBR’s Central Intelligence Cell (CIC) is collecting detailed information on ongoing development projects and the contractors involved from various ministries, divisions, departments and government agencies.

Recently, the CIC sent a letter to the chief engineer of the Roads and Highways Department (RHD), seeking detailed information on its ongoing projects.

The letter, signed by CIC Director General Mohammad Abdur Rakib, requested project names and types, development partners, contractor companies, their Business Identification Numbers (BINs) and Taxpayer Identification Numbers (TINs), total project costs and project commencement dates.

The CIC said it had received confidential information suggesting that some contractors working on ongoing development projects were not properly depositing government revenue.

The intelligence cell has requested project-specific and contractor-specific information to verify the allegations. It has also sought cooperation under Section 82 of the Value Added Tax and Supplementary Duty Act, 2012.

For each project, agencies have also been asked to specify its source of funding—whether it is government-funded, financed through foreign assistance or funded through another source.

The information will allow the CIC to compare the amount contractors received from government projects with the VAT and income tax they deposited with the NBR.

A CIC official said discrepancies or evidence of tax evasion could lead to legal action against the companies concerned.

Investigation Extends Beyond Roads

The investigation is not limited to road and highway projects. Similar information has reportedly been sought from the ministries of education, health, local government, railways, shipping, water resources, and housing and public works.

The CIC has also contacted the Local Government Engineering Department (LGED), Bangladesh Railway and other relevant agencies.

A significant portion of Bangladesh’s development budget is spent on roads, bridges, railways, local infrastructure, waterways, education, healthcare and other construction projects. Contractors receive substantial payments for implementing these projects, making their tax and VAT compliance an important part of the government’s revenue monitoring.

The investigation comes amid growing pressure on the NBR to increase revenue collection.

The revised Annual Development Programme (ADP) for FY2025-26 stood at Tk208,935 crore, while the ADP for FY2026-27 has been set at Tk3 lakh crore.

During the first 11 months of FY2025-26, the NBR collected Tk360,642 crore against a revised target of Tk442,084 crore, leaving a shortfall of Tk81,442 crore.

For FY2026-27, the government has set a total revenue collection target of Tk6.95 lakh crore, of which the NBR is expected to collect Tk6.04 lakh crore.

The CIC’s current exercise is aimed at establishing a project-level picture of contractors’ earnings, tax and VAT registrations and payments, and determining whether the government is receiving the revenue due from its development spending.