Online tax returns submission may be made compulsory from next July

The National Board of Revenue (NBR) is planning to make it compulsory for all the individual taxpayers to submit their income tax returns online from next fiscal.

The revenue collecting authority has taken the move as it got good results from the online income tax return submission this year.

Initially the online tax return has been open for all taxpayers as per their wish. But later the NBR made it mandatory for the government employees under the jurisdiction of income tax circles located in Dhaka North, Dhaka South, Gazipur and Narayanganj City Corporation, as well as sections of the private sector.

Online filing of income tax returns has been made mandatory for working officers/employees of all scheduled banks, all mobile telecom service providers and some multinational companies namely Unilever Bangladesh Limited, British American Tobacco Bangladesh Company Limited, Marico Bangladesh Limited, Berger Paints Bangladesh Limited, Bata Shoe Company (Bangladesh) Limited, Nestlé Bangladesh Plc.

The NBR has taken a move to simplify submission of income tax return and payment procedure online for the tax year 2024-2025.

From this system, taxpayers can pay taxes through internet banking, card payment (debit/credit card) and mobile banking and get the facility of downloading and printing copies of filed returns, receipts, income tax certificates, TIN certificates. Besides, anyone can download and print the e-Return filed for the previous year.

Getting positive feedback from the taxpayers, the NBR has decided to hold a seminar with the taxpayers to find out the problems they have faced while submitting their tax returns online.

"Within a very short time, maybe one or two weeks, we will hold a seminar with the taxpayers to know their hurdles while filing income tax returns online," NBR Chairman Md Abdur Rahman Khan told a programme on Sunday.

He said that after getting the problems from the taxpayers the NBR would address those to ensure that the same problems do not recur.

"Then we could make the online return submission compulsory from  next July," he said.

The NBR chief also said that the target of his organisation is to make sure that the compliant taxpayers must not face any unnecessary hassle.

"For that reason we already said the audit selection will be risk based and automated," he said.

He also mentioned that to do so it needs data which will not be available if the tax return is not submitted online.

"If we take paper returns then we will not get the data, as a result we will not be able to complete the process," he added.

Last September, the National Board of Revenue (NBR) had asked taxmen not to select tax returns afresh for auditing, finding the existing audit system faulty that causes unusual harassment to taxpayers.

Use of discretionary power of the taxmen has been allowed to a great extent in the current audit guidelines which taxpayers often alleged as injustice to them.

In a letter, the NBR had asked all field-level tax offices not to select new files for auditing until the next order issued.

However, the tax returns already selected for audit would go through auditing in the normal process.

Bangladesh continues to grapple with one of the lowest tax-to-GDP ratios in the South Asian region—just 7.3%. In contrast, neighboring countries like India (12%), Nepal (17.5%), and Bhutan (12.3%) have significantly higher ratios. Moreover, only 5.2% of Bangladesh's population are registered as taxpayers, a stark contrast to India's 23.08%.

Currently, 67% of the government's revenue comes from indirect taxes. The NBR has acknowledged the need to shift this dependency toward direct taxes. The NBR is working to broaden the tax net in a way that is more convenient for taxpayers, encouraging compliance while reducing the burden of indirect taxation.

The implementation of the Income Tax Act 2023 has introduced new audit guidelines that have raised concerns about potential increased bureaucracy and costs for taxpayers. Under the guidelines, taxpayers may face multiple stages of interrogation, which some fear could open the door to underhand dealings.

To combat these concerns, the NBR has been developing specialized software, known as the "Risk Management Engine," which is designed to bring greater transparency to the tax audit process. The software will link with other government agencies to gather data and select tax files for audit based on risk factors, helping to detect tax evasion more effectively.