Transparency International Bangladesh (TIB) has urged the government to prioritize domestic technological capacity and potential in its approach to revenue management, instead of blindly following donor-driven prescriptions for new projects. The anti-corruption watchdog has expressed concerns over the government’s plan to launch another costly revenue digitization initiative without addressing the failures of previous projects.
The National Board of Revenue (NBR), with assistance from the World Bank, is set to implement a new project worth approximately Tk1,000 crore aimed at automating income tax collection and curbing tax evasion. However, TIB argues that previous automation efforts have failed to yield meaningful results, leading to persistent issues such as corruption, invoice fraud, and a stagnant tax-to-GDP ratio.
Dr. Iftekharuzzaman, Executive Director of TIB, stated in a press release, “The repeated initiation of high-cost projects, like the upcoming Tk1,000 crore initiative funded by the World Bank, highlights the inefficiency of previous efforts. Processes such as income tax return filing and VAT collection remain predominantly manual, plagued by harassment and corruption. These failures demand an urgent investigation before launching yet another expensive project.”
Despite spending heavily on three major revenue digitization projects over the past 15 years, the NBR has failed to meet its goals. Bangladesh's tax-to-GDP ratio dropped from 9.1% to 8.5% over the last 12 years, placing the country among those with the lowest ratios globally. TIB attributes these shortcomings to corruption, a lack of consistency in tax policy, and the reluctance to leverage domestic technological expertise.
The government’s new five-year project, Strengthening Institutions for Transparency and Accountability (SITA), has been allocated USD 250 million. It aims to simplify tax management, automate public revenue processes, and enhance transparency in procurement and investment. However, TIB criticized the approach, citing past challenges with vendor-locked software and donor-driven conditions that created operational bottlenecks.
Dr. Iftekharuzzaman further emphasized, “The failure of earlier projects to deliver functional software highlights the need to prioritize domestic technological capabilities. Local firms have proven capable of developing solutions at lower costs. Instead of investing in a skill development center for proprietary SAP technology, the government should focus on fostering sustainable, local technological infrastructure.”
TIB also questioned the rationale behind establishing a skill development center for SAP technology under the new project, suggesting the possibility of creating long-term dependency on specific software providers. The watchdog has called for greater involvement of domestic technology firms and a transparent review of project planning and implementation to ensure cost-effectiveness and sustainability.
The organization reiterated the importance of using advanced technologies, including artificial intelligence (AI), to combat tax evasion and improve revenue collection. However, it stressed the need for these technologies to align with local needs and capacities.
As Bangladesh continues its push for economic reforms, TIB’s statement underscores the critical need for careful planning, accountability, and the empowerment of local technological talent to achieve sustainable revenue management solutions.
