Government Plans New Initiative to Speed Up Resolution of Long-Pending Tax Cases

PNN News Desk | Dhaka

The government is moving toward major reforms to address long-standing tax and VAT disputes and the huge amount of money tied up in such cases. In the proposed 2026–27 national budget, the mandatory deposit requirement for income tax and VAT appeals is set to be significantly reduced, which has received a positive response from the business community.

According to sources, more than 33,000 tax cases are currently pending in various appellate forums in the country. Over 110,000 crore taka remains locked in these disputes for a long time, negatively affecting business and investment activities.

Under the proposed changes, the deposit requirement for income tax disputes from Commissioner (Appeal) level up to the High Court is planned to be reduced from 35 percent to 14 percent. Similarly, for VAT and customs-related disputes, the requirement may be reduced from 20–30 percent to just 4 percent.

Officials at the Ministry of Finance say the main objective of this initiative is to make access to justice easier for taxpayers and reduce unnecessary financial pressure. It is also part of efforts to make tax administration more modern, transparent, and investment-friendly.

Business leaders say that the high deposit requirement has long created significant financial pressure on many companies. Due to money being locked until case resolution, many firms could not use those funds for expansion, investment, or production activities.

Investment experts believe the new policy will improve cash flow for companies and make participation in legal tax dispute processes easier. It may also make Bangladesh’s tax system more acceptable to foreign investors.

However, tax experts have welcomed the reform but also raised caution. They say lower deposit requirements may encourage some taxpayers to prolong cases. Therefore, ensuring a fast and efficient dispute resolution system is equally important.

At present, many tax and VAT cases take 7 to 15 years to reach final resolution, according to stakeholders. Experts believe that along with reducing deposit rates, an efficient dispute resolution mechanism is necessary to ensure real benefits.

Alongside reforms in the appeal system, emphasis has also been placed on the digital transformation of tax administration. From the next fiscal year, electronic VAT return submission is expected to be made mandatory, and simplified online return systems for small businesses are also being introduced.

Finance Minister Amir Khosru Mahmud Chowdhury said in his budget speech that reducing administrative complexity, increasing transparency, and ensuring a business-friendly environment are key government goals. He added that faster dispute resolution would boost investment, production, and employment.

Stakeholders believe that if implemented effectively, the reform could mark a major turning point in Bangladesh’s tax administration and create a more supportive environment for business and trade.