NBR brings 57,535 companies under tax net

Highlights

• The total incorporated businesses 1.76lakh
• 78,000 had TIN until fiscal 2019-20
• 1.35 lakh companies came under the tax net by February 16
• NBR collected more than Tk20,000 crore in FY2019-20
• The submission of tax returns rose 35% in this fiscal year

The National Board of Revenue has identified 57,535 companies who do not pay any tax to the government.

They have been doing business but have not applied for a taxpayer identification number (TIN) yet.

The tax authority identified the companies through drives from August 2020 until February 16. It has issued electronic TINs to the companies and taken other measures in line with the Income Tax Act to collect tax from them. 

A member of NBR, Alamgir Hossain told The Business Standard that the companies had been brought under the tax net by issuing e-TIN.

The NBR is putting emphasis on tax collection, rather than giving punishment, Alamgir said.

All these companies have varied problems. Some of those could not sustain business. Many do not earn enough to pay tax, despite being in operation. Therefore, the tax regulatory authority will take measures, considering their status, Alamgir added.   

A taskforce was formed in August 2020 to identify companies that did not pay tax.

Shabbir Ahmed, joint director of the central intelligence cell, NBR, was leading a team of seven to complete the task.

ICT, manufacturing and e-commerce companies dominate the list of new corporate TIN holders and most of them are located in Dhaka.

According to the taskforce committee, there were 78,000 corporate TIN holders until August 2020. Of them, 28,200 companies submitted tax returns in 2019.

After the drive, the total number of corporate tax holders is nearly 135,000. The tax returns increased by 35%.

At present, 1,76,000   companies are registered with the Registrar of Joint Stock Companies and Firms.

Of them, 35,000-36,000 companies have filed tax returns. The NBR gets more than Tk20,000 crore annually from these companies. 

According to sources at the NBR, the taskforce has also looked for fake audit reports, if any, and scrutinised return submissions. It ensured that audit reports submitted were authentic, alongside identifying tax evaders.

One of the committee members said 70% of the incorporated businesses had been issued e-TINs. More drives are underway to bring the remaining 30% under the tax net by April.

"This is to achieve the revenue target of this fiscal year." 

The NBR has been given a target to collect Tk3,30,000 crore in tax revenue in this fiscal year. Of the amount, income tax should amount to Tk1,05,000 crore.

The NBR collected Tk42,100 crore in income tax between July and December.

Economists hailed the efforts to meet the goal.

Executive Director of Policy Research Institute Dr Ahsan H Mansur said, "We have been all along insisting on stopping tax evasion and increasing the number of tax payers, instead of exerting more pressure on the existing tax payers."

Due to a lack of capacity and initiatives, the NBR could not do it until now.

The new measure will ease the pressure on the existing tax payers, Ahsan H Mansur said.