Staff Reporter :
In a bid to enhance revenue collection, the International Monetary Fund (IMF) has strongly advised Bangladesh to introduce provisions mandating large companies to submit their income tax returns through online from the middle of the current fiscal year.
The IMF also recommended the cancellation of tax exemptions provided through the National Board of Revenue (NBR) once their expiration deadline approaches, with no further extensions.
Moreover, the IMF has urged the NBR to take a stringent stance in reducing tax exemptions in the upcoming budget for the fiscal year 2024-25.
The recommendations were emphasised during a recent meeting in Dhaka, where a delegation from the IMF, including Abu Hena Md. Rahmatul Muneem, Chairman of the National Board of Revenue, engaged in discussions with senior officials.
Highlighting the importance of online tax return submission, the IMF stressed the need to make it mandatory for large companies after June of the current year.
They further proposed that corporate entities benefiting from any form of incentive should also be obliged to submit returns online, failure to comply resulting in the cessation of incentives.
The IMF assured assistance to corporate entities regarding online return submission, citing the availability of necessary software, computers and other logistic supports.
Additionally, the IMF provided guidance on the rate of depreciation and valuation of benefits for corporate income tax, asserting that fostering business confidence could last up to 10 years.
In a significant move, the IMF advised against providing exemptions for housing and medical allowances, which constitute a third of the total salary, to individual taxpayers.
They also discouraged providing tax exemption opportunities opposite to various types of allowances given to government employees, including pension and gratuity.
Furthermore, the IMF recommended discontinuing tax benefits on remittances or expatriate incomes and various types of bonds provided by the government.
They suggested abolishing tax exemptions on income earned from the stock market.
Alongside increasing the threshold for tax-free income on personal accounts, the IMF proposed raising the minimum tax rate from 5 to 10 percent.
