Registered businesses must be forced to pay tax

The government has made mandatory the submission of tax return by November 30, according to the Income Tax Act 2023.

But the fact is around 40% of the registered companies are reportedly doing business in Bangladesh without any taxpayer identification number (TIN).

This is really very surprising. The National Board of Revenue (NBR), since August 2020, is working to bring all the registered companies under the tax net.

According to the Office of the Registrar of Joint Stock Companies and Firms (RJSC), till September 2022, a total of 275,460 public and private limited companies got registration from the office.

Among the total corporate TIN holders, nearly 60% of them did not submit any returns to the NBR, nor did they pay any taxes. Normally the NBR collected information from the RJSC and brought the companies without TIN under the tax net.

It is mandatory for all companies registered under the Companies Act to take TIN and submit returns at the end of the year but often a number of businesses registered their companies with a fake TIN.

In addition, multiple companies have registered with the RJSC using the same address.

As per income tax law, the submission of tax returns along with audited financial reports through the data verification system (DVS) of the Institute of Chartered Accountants of Bangladesh (ICAB) is mandatory for the companies.

Businesses for long have been demanding for easing the taxation system by digitization, transparency, one-stop solution, and many more.

However, the government’s commitment to create ease in doing business has not been achieved nor is the taxation system generalized. Instead, speed money, corruption, under-table dealing, and structural and non-structural tax, VAT and extortion have pushed many small and medium businesses to suspend their business, manufacturing, service delivery, and other forms of business.

The government should bring all corporate businesses under the tax net, and provide special privileges to new enterprises and businesses. Besides, the government should utilize the tax in an effective way that encourages taxpayers to pay.

Also, the NBR needs to work towards changing the types of tax surveys, and ensuring tax compliance and tax return submissions of entities with tax identification numbers (TINs).