Most reduced tax rates to go standard: NBR chairman

National Board of Revenue (NBR) Chairman Abdur Rahman Khan has announced that most taxpayers currently enjoying reduced tax rates will transition to regular rates starting from the next fiscal year.

"There is no justification for demanding reduced tax rates. Instead, you should pay taxes on actual taxable income. If there is no taxable income, then no tax needs to be paid," he said during a pre-budget discussion with the Economic Reporters Forum (ERF) at the NBR headquarters in Agargaon, Dhaka, today.

The NBR chairman, however, reassured that tax exemptions would not be fully removed.

"We provide tax exemptions for a specific period, but many businesses continuously seek extensions or try to exploit these benefits," he said.

The NBR chairman did not disclose which sectors would face the reduction of tax benefits.

Abdur Rahman also spoke about the issue of tax evasion, saying many significant cases of tax evasion exist in the country and action must be taken against them. "Instructions have been given to field officials in this regard," he said.

Although tax evaders often go unnoticed, Abdur Rahman highlighted that compliant taxpayers are frequently scrutinised. He did not provide any specifics on the major tax evasion cases.

Last week, the country was abuzz with discussions on tax evasion after Abdur Rahman's statement to the media about a tax fraud case involving the transfer of Tk721 crore from abroad in the name of remittance by an individual.

NBR's intelligence departments have since ramped up efforts to uncover more information about tax evaders.

Abdur Rahman also said 15 lakh tax returns were submitted online last year, with two-thirds of them reporting no taxable income, which he termed "zero returns".

In a meeting with the ERF earlier, he said out of about 45 lakh returns, two-thirds were zero returns.

The NBR chairman assured that existing disparities in the tax system would be addressed in the upcoming budget. He mentioned that the advance income tax collected as a minimum tax would be adjusted in the following years.

Furthermore, the excise duty on bank deposits would be eased in the next fiscal year, particularly benefiting small deposit holders and borrowers.

Abdur Rahman also indicated that the next year's tax policy would bring more significant changes to income tax regulations compared to VAT and customs duties.

At the meeting, ERF President Doulot Akter Mala presented 37 proposals from the organisation, including suggestions to simplify the tax system, increase automation, and prevent double taxation on bank deposits.