Budgetary amnesty helps boost income tax return filing
Highlights:
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Tax return submission in July 2021: 14,743
– In July 2022: 50,532 -
NBR hopes to add another 15 lakh TIN-holders in FY23
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There are over 78,60,000 TIN-holders in the country
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Last year, income tax returns submission was 29 lakh
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Income tax return is mandatory to get 50 types of services
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(Sources: NBR, budget speech FY 2022-23)
Income tax return submissions in the country grew 242% year-on-year in the first month of the current fiscal 2022-23, thanks to a budgetary amnesty for TIN holders who have never filed their tax returns.
Data obtained from the National Board of Revenue (NBR) show that the number of income tax return submissions stood at 50,532 in July this year, up from 14,743 in the same month a year ago.
According to the national budget for FY23, people who have tax identification number (TIN) but have not ever filed tax returns will be exempted from paying fines for previous years if they file returns this fiscal year.
NBR officials have said the government in this year's budget has offered the amnesty to encourage TIN-holders to submit tax returns. Earlier, such TIN-holders had to pay a minimum Tk5,000 in fine for not submitting the return in previous years.
The officials expect that the facility will help to bring another 15 lakh TIN-holders under the tax net by this fiscal year.
Experts believe such a move was positive and timely to increase revenue earnings and contribute to ensuring discipline in the country's financial sector as many people, despite having TINs, had been reluctant to file tax returns fearing harassment and fines.
At present, the number of e-TIN holders in the country is 78.61 lakh, while only 29 lakh submitted their income tax returns in the last fiscal year.
It is compulsory for individuals with over Tk2,50,000 of yearly earnings to avail e-TIN.
Besides, tax return filing has been made mandatory for people to get about 37 services, while three categories are exempted from filing tax returns but they must have e-TIN.
Sources at the NBR's income tax department said they could not trace 26 lakh TIN holders and these people have been categorised as "TINs suspended, not cancelled".
In future, in the event of them availing any services, which are integrated with the Income Tax Department, they will be identified.
Until two years ago, only those who had taxable income were obliged to file returns. Currently, all TIN holders are required to submit their returns. However, return deposits are not growing at the expected rate.
In addition to individual taxpayers, the Registrar of Joint Stock Companies and Firms (RJSC) has about 1.75 lakh registered companies, of which less than 30,000 submit returns.
In his budget speech for FY23, Finance Minister AHM Mustafa Kamal said, "The number of population belonging to the middle class and above is about 40 million in our country, but most of them are not paying income tax. Hence, necessary steps are being taken to prevent tax evasions and to bring all the people who have taxable incomes under the tax net."
"We are working with the aim of increasing the number of TIN holders to 10 million, and in the last four years, the number of TIN holders has increased on average more than 1 million a year. By April 2022, we have been able to raise the number of TIN holders to 75.10 lakh. At the same time, by March 2022, the number of tax returns has increased to 29 lakh".
"We are working on simplifying tax returns to make it easily understandable, and in one page for individual tax-payers. Apart from that, return submission will be made 35 mandatory for everyone except a few cases," he added.
