TAX BENEFITS

Cos must ensure staff’s tax return submission

Staff Correspondent | Published: 22:28, Jun 11,2017 | Updated: 01:21, Jun 12,2017

 
 

The National Board of Revenue will shrink tax benefit to private sector companies if they fail to ensure income tax returns submission by its employees.
Finance minister AMA Muhith has incorporated a provision in the proposed Finance Bill 2017 in this connection amending the Income Tax Ordinance-1984.
According to the provision, the tax officials will not accept any payment to an employee as admissible allowance for tax benefit if the employee is required to file income tax returns but fails to do the same.
Generally, private employers can claim the salary payment to its employees as admissible expenses on which the employees are not required to pay tax.
Companies will have to pay income tax on the payment made to employees who failed to file tax returns despite legal obligation of submission of tax returns from the fiscal year 2017-18.
According to the income tax law, people having annual income above tax-free limit which is now Tk 2.50 lakh are required to file income tax returns.
In addition, all employees holding executive and managerial position in a company must have to file tax returns, according to the provision of the proposed finance bill.
The NBR will also disallow the payment made to any dealers or agents of a company, agents of mobile banking and mobile phone recharge and some persons who have earnings from services like advisory or consultancy service, catering, event management, supply of manpower or providing security service if the person does not have 12-digit electronic taxpayers identification numbers.
According to the proposed finance bill, obtaining e-TINs is mandatory for persons maintaining the agency or the distributorship of a company, receiving commission for mobile banking and mobile phone recharge activities and receiving payment for the above-mentioned services.
Officials said that the NBR took the decision to increase tax compliance by both the employees and the employers and boost payroll tax in the country.
Employers will have to ensure that their employees with taxable income submit tax returns for claiming expenses for tax exemption, they said.
They said that the employers would not need to submit tax returns of the employees.
The employers will only include the information that their employees submitted tax returns, they added.

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