NBR Considers Returning to Monthly VAT System
To reduce harassment of businesses and facilitate ease of doing business, the government had introduced a system in the budget allowing businesses to file VAT returns and pay VAT every three months instead of monthly. However, following a significant decline in VAT collection during the first two months under the new system, the government may restore the previous monthly VAT payment system. Sources at the National Board of Revenue (NBR) ensured this.
The NBR’s VAT Policy Wing has sent a letter to the Ministry of Finance on the matter, sources said. However, the government wants to consult businesses before making a final decision. NBR member Syed Mushfiqur Rahman said he had heard that the VAT Policy Wing had sent a letter to the Finance Ministry on the issue.
VAT collection in July and August of the current 2026–27 fiscal year fell by nearly 20 percent compared with the same period last year. In July, VAT collection stood at Tk 9,301 crore, down from Tk 11,547 crore in the same month last year. In August, collection was Tk 8,362 crore, compared with Tk 11,081 crore a year earlier.
The number of VAT returns filed also declined in July from the previous month. While 328,000 VAT returns were filed in June, the number fell to 306,000 in July.
However, NBR officials said it would only be possible to determine whether VAT returns and collection have actually declined or increased after the September figures are available, as the new system allows returns to be filed every three months. They said a decline in VAT collection and return filings during the first two months under the new system was not unusual.
An NBR official, speaking on condition of anonymity, said it would be possible to determine after three months whether the decision to allow quarterly VAT returns and payments instead of monthly ones had been counterproductive.
“There has been discussion among us that public money cannot remain with businesses for a long period. The government also has to pay interest on its loans,” the official said.
