What the NBR's proposed taxpayer profiles will track
The profiles will bring together taxpayers’ declared income and tax payments with bank transactions, property ownership, company ownership, stock market investments, import and export activities and withholding tax records.
The National Board of Revenue (NBR) plans to create automated profiles for taxpayers by integrating information on their income, spending, assets and financial activities to identify potential tax evasion.
The profiles will bring together taxpayers' declared income and tax payments with bank transactions, property ownership, company ownership, stock market investments, import and export activities and withholding tax records.
The system will also track foreign travel, bank accounts, high-value transactions, property and flat purchases and sales, vehicle ownership, high-value utility connections, rental income, and spending on education and healthcare.
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The NBR plans to use the data to automatically assess whether a taxpayer's declared income is consistent with their expenditure and accumulated assets. Significant discrepancies would trigger a higher-risk classification for further scrutiny.
For example, the NBR said a taxpayer could declare an annual income of Tk12 lakh while maintaining Tk1.2 crore in bank deposits, buying a vehicle worth Tk50 lakh and land worth Tk1 crore, and travelling abroad five times a year.
Such inconsistencies would be flagged automatically by the proposed National Income Tax Data Matching System, allowing the tax authority to take data-driven enforcement measures.
The NBR plans to integrate taxpayers' bank, property, vehicle and company information and pilot an automated income and asset profiling system within six to 12 months.
Within two to three years, it aims to establish integrated taxpayer accounts, introduce full third-party data matching, set up an income tax data warehouse and automate the detection of mismatches between income and assets.
The plans were presented at a meeting of the Parliamentary Standing Committee on the Ministry of Finance yesterday, where the NBR outlined a series of measures to increase revenue collection and improve tax compliance.
The NBR also plans to profile high-net-worth individuals to assess whether their tax payments are proportionate to their economic capacity.
