Tax return filings grew by over 7 lakh till April
Staff Reporter :
The National Board of Revenue (NBR) is facing pressure to boost tax collection by expanding tax coverage in line with the conditions set by the International Monetary Fund (IMF).
The revenue board, however, has made efforts to increase the number of individuals and organisations registering for Tax Identification Number (TIN) in recent years.
Following this, the number of tax returns submission increased by over seven lakh in one year for the first time, although the return filing is yet to be reached a satisfactory level.
Until April this fiscal year, the NBR received 31.96 lakh returns from taxpayers, mainly individuals, which was 22 per cent higher from that filed in fiscal year 2021-22. The number of returns was 25.54 lakh in last fiscal year, according to the NBR data.
As of April this year, the total number of registered taxpayers was around 88 lakh and a large number of people who have taxable income are out of the tax net.
“Still, the total number of tax returns submitted is just over one-third of the total number of people who have taxpayer identification numbers (TIN),” Dr Zahid Hussain, former lead economist of the World Bank of Dhaka office, told The New Nation.
“Efforts to expand the tax net needs to be strengthened. Automation and connectivity among the government’s various agencies need to be increased so that they can share and cross-match data to identify people with taxable income,” he added.
The latest growth is the highest in five years, with taxmen linking the surge to the introduction of a new rule requiring people to file their income, expenditure and wealth statements to avail 38 types of services.
Among others, people have to furnish proof of submission of returns (PSRs) or acknowledgement receipts of return filing to avail loans of over Tk 500,000 from a bank or financial institution.
The proof is also necessary for obtaining or maintaining a credit card, opening postal savings accounts exceeding Tk 500,000 or purchasing state sponsored savings instruments, known as “sanchaypatra” in Bangla, of over Tk 500,000.
People who open and continue using bank accounts of any sort with a credit balance of over Tk 10 lakh also needed to submit tax returns and submit acknowledgement receipts or tax certificates, among others.
NBR will have to collect an additional Tk 234,000 crore in the three years from the current fiscal year in order to meet the IMF conditions tagged with its $4.7 billion loan.
Attaining the target will be very challenging if the NBR follows a “business as usual” approach, experts said.
The Washington-based multilateral lender attached conditions that Bangladesh will have to increase the tax-to-GDP ratio by 1.7 percentage points to 9.5 per cent at the end of the fiscal year of 2025-26, from 7.8 per cent currently. The country will have to raise the tax-to-GDP ratio by 0.5 percentage points by FY24 with a subsequent hike of 0.5 percentage points in FY25 and 0.7 percentage points in FY26.
