The National Board of Revenue (NBR) may have incurred a revenue loss of Tk 1.88 lakh crore in the financial year 2022–23 as a result of extensive VAT exemptions and widespread tax evasion, according to a new study by the Centre for Policy Dialogue (CPD).

The findings were presented on Tuesday at an event held in a hotel in Dhaka, where the private research organisation revealed the results of its recent investigation into the country’s VAT system.

Tamim Ahmed, Senior Research Associate at CPD, stated that the study calculated the effective VAT rate – which came out to 11.73%, considerably lower than the standard rate of 15% set by law.

‘Using the effective rate, we estimated the potential VAT revenue that should have been collected. Even after accounting for the actual amount collected, we found a gap of around Tk 1.88 lakh crore.’ said Ahmed.

The study revealed that in the 2022–23 fiscal year, the NBR collected Tk 1,32,036 crore in VAT.

However, the potential collection during that period could have reached Tk 3,20,117 crore, suggesting that the remaining amount was lost due to tax evasion and policy-driven exemptions.

While the standard VAT rate remains fixed at 15% under the law, numerous goods and services are exempted, which has led to a much lower effective rate in practice.

CPD analysis, based on these exemptions, concluded that the current average effective VAT rate is only 11.73%.

To conduct the study, CPD collected data on corporate taxes from 123 companies based in Dhaka and Chattogram, along with VAT-related information from 389 business establishments across various regions of the country.

The research also highlighted significant challenges within the tax administration system.

A majority of companies expressed concerns over corruption and unfair tax assessments. Specifically, 72% of the surveyed companies identified corruption among tax officials as one of the major obstacles they face in complying with corporate taxation.

Furthermore, 82% believed that the tax rates imposed on them were unjustified, and 79% pointed to a lack of accountability among NBR officials as a key issue.

In response to a remark from an NBR official suggesting that the study would have been more relevant if it had used 2025 data, CPD’s Research Director, Khondaker Golam Moazzem, explained that efforts were indeed made to obtain more recent data.

‘We also wanted to conduct the study using data from 2025. But unfortunately, we faced significant delays and complications in securing the necessary information from the NBR,’ he said.