Trade-based money laundering a ‘collective failure’: NBR Chairman
Business Report :
National Board of Revenue (NBR) Chairman Abdur Rahman Khan has identified money laundering through trade-based manipulation-particularly over- and under-invoicing-as a “collective failure” of both banking institutions and customs authorities.
His remarks came during a debate programme titled “Achieving Expected Revenue Collection is Possible Through Reforms in Tax Management,” hosted by Debate for Democracy at the Bangladesh Film Development Corporation (BFDC) in the city on Saturday.
“Over- and under-invoicing remains a key channel for illicit financial flows,” Khan said. “Banks have access to global pricing data through various international software and databases.
When opening Letters of Credit (LCs), they can easily compare declared product values with international market prices. Yet they often fail to do so.”
He emphasized that customs also share responsibility for allowing such practices to continue unchecked.
“This is a regulatory failure on both sides. NBR has attempted to combat under-invoicing by setting minimum tariff values for certain imports, but unfortunately, this sometimes penalises honest importers while failing to catch the fraudulent ones,” he added.
Trade-based money laundering (TBML) is estimated to be one of the largest sources of capital flight from developing economies, including Bangladesh.
According to Global Financial Integrity (GFI), Bangladesh loses billions of dollars annually due to misinvoicing, which not only erodes government revenue but also distorts trade data and weakens the formal economy.
Addressing broader revenue reform efforts, Khan cautioned against expecting change from mere structural shifts.
“Creating separate wings for policy and operations won’t increase revenue unless they are backed by transparency, efficiency, and above all, implementation,” he noted. “Reform committees are often formed but rarely deliver results unless recommendations are acted upon. Political will is key.”
The NBR chairman stressed the critical role of digitalisation. “We are increasingly relying on automation to bring transparency to tax administration. For instance, we recently selected 15,400 files for audit through a randomised digital process.
We’ve also made significant progress through the Bangladesh National Single Window, where over 5 lakh applicants received services in under an hour.”
He added that in FY24, 17.12 lakh Taxpayer Identification Number (TIN) holders submitted tax returns online, and from this year, e-filing will become mandatory for all TIN holders.
The debate saw Green University of Bangladesh argue in favour of tax reform, while Chattogram Maa-O-Shishu Hospital Medical College presented counterarguments. The Green University team was declared the winner by a panel of judges. Debate for Democracy Chairman Hasan Ahamed Chowdhury Kiran moderated the session.
