NBR seeks direct access to taxpayers’ bank info linked to online returns

The National Board of Revenue (NBR) wants to have real-time access to taxpayers' bank information – including account balances, interest income, and any taxes deducted at source by banks – directly linked to their online tax returns. The move aims to curb tax evasion, enhance transparency, and make return filing easier, according to officials.

Officials told TBS that the NBR has formally asked the Bangladesh Bank and the Finance Division to review its proposal in a letter sent on 14 August.

Experts have welcomed the initiative, saying it will curb tax evasion and banking irregularities by preventing the concealment of accounts and transaction details.

However, bankers caution that this may lead to the disclosure of taxpayers' confidential banking information, which could discourage people from depositing money in banks.

At present, the country has about 1.2 crore Tax Identification Number (TIN) holders. Last year, around 45 lakh individuals filed returns, of which 15 lakh were submitted online, according to NBR. 

From this year, the NBR has made online submission of tax returns mandatory for all individuals, with a few exceptions.

A senior NBR official, on condition of anonymity, told TBS, "We are not seeking access to all information of individual assessees. We have requested only the details already included in tax returns, integrated with the online return system, so that taxpayers have synchronised access to the same information."

"This will be helpful for taxpayers," he said. "Banks deduct tax at source (TDS), and when taxpayers file returns, they currently need separate certificates from each bank. With real-time access, this information will automatically appear in the online return form at the time of submission, eliminating the need to collect certificates from multiple banks."

Another official said, "Only three types of information have been sought: interest income, tax deducted at source, and the closing balance on the last day of the relevant fiscal year. No further transaction details are being requested."

He added, "If amending the existing Bank Companies Act is required for this, the relevant government department will take it into consideration."

"Although I have not yet received such a letter from the NBR, discussions on the matter are underway," Governor Ahsan H Mansur told TBS on Monday.

He said, "Currently, we (assesse) attach bank statements while filing tax returns. The NBR has suggested that these statements could be provided directly from the banking system, allowing the online return system to have direct access. But it is not all information of taxpayers — only the details that must be attached with the return."

Attempts to contact NBR Chairman Abdur Rahman Khan for comment were unsuccessful.

Currently, under the Bank Company Act, banking information is kept confidential, meaning the NBR or any other agency does not have direct or real-time access to depositor account details. At present, if information on an individual or institution is needed, banks provide it only after receiving a formal request through the Bangladesh Bank.

If implemented, this new real-time access system would allow tax officials direct access to the specified taxpayer information.

SK Zami Chowdhury, managing partner of Chowdhury Emdad and Company, a chartered accounting firm, told TBS, "It seems the aim is to prevent tax evasion. If taxmen gain access to these three pieces of information, they can be able to get access to other data as well. Once this is implemented, the authority may even curb cash transactions in the future."

"This may create challenges for banks, and taxpayers may become somewhat hesitant to keep their money in banks," he said. 

"However, I believe the NBR's intention is good and necessary. If traceability in banking transactions is ensured, it will be possible to prevent not only tax evasion but also many irregularities in the banking sector," Zami added.

How NBR's plan to track deposits, TDS via online returns will work

Currently, an individual must provide their NID number to open a TIN. The same NID information is also required to open a bank account. 

If the online tax return system is integrated with banks, it will be possible to identify the number of bank accounts linked to an NID. Information such as the total deposits, annual interest earnings, and the amount deducted as TDS will automatically appear when filing a return, and will be reflected in the tax calculation.

Nezam Uddin Mahmud, a tax expert, told TBS, "At present, when filing returns online, taxpayers only need to declare the amount from which tax has already been deducted at source by the bank. But there is no system to verify this information. As a result, if someone withholds information about certain bank accounts to evade taxes, or provides only partial information, it is difficult to detect."

"To obtain such information, a letter has to be sent to the bank under the current rules. But in practice, it is impossible to collect data on millions of taxpayers in this manner, as the online return submission system is mandatory by this year for almost all individual assessees. With direct access, the NBR could easily detect hidden accounts or information and prevent loopholes," he added.

According to him, "This system will actually make the process easier for compliant taxpayers as well."

Fear of confidential info falling into the wrong hands

Bankers and some experts have raised concerns that taxpayers' confidential banking information could be misused if such access is granted.

Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank, said, "If other organisations gain access to taxpayers' banking information, this data could end up in many hands, creating new risks. Such concerns might discourage depositors and negatively affect bank deposits."

He added, "The issue is not just about preventing tax evasion—it's also about whether sensitive information will be shared."

Currently, banks provide information on any taxpayer upon request from the tax authority, and this is considered a good practice.

Shahadat Hossain, former president of the Institute of Chartered Accountants of Bangladesh (ICAB), also expressed concern about data leakage. 

When asked whether this could compromise taxpayer privacy, BB governor said, "We will examine these issues. A decision will also be made after reviewing practices in other countries."

While acknowledging that NBR's move is aimed at preventing tax evasion in the long run, Shahadat suggested that access should be strictly limited to a certain level of authorised NBR officials.