Income tax officials allowed to conduct extensive enquiry for prosecution

Jasim Uddin | Published: 00:05, Aug 05,2018


A file photo shows taxpayers are seen submitting their income tax return at a tax fair in Dhaka. Income tax officials will now be able to conduct extensive enquiry and investigation for prosecuting tax-related offenders following inclusion of a provision in the income tax law.— New Age photo

Income tax officials will now be able to conduct extensive enquiry and investigation for prosecuting tax-related offenders following inclusion of a provision in the income tax law.
Officials of the National Board of Revenue said that the government empowered the tax officials to conduct enquiry and investigation prior to filing criminal cases against individuals and firms for committing tax-related crimes.
A provision has been included in the Income Tax Ordinance-1984 through the Finance Act-2018 in this connection, they said.
According to the provision, deputy commissioner of taxes (DCT) may make further enquiry and investigation, in addition to the enquiry already made, for the purpose of prosecution of an offence under the income tax law and Money Laundering Prevention Act-2012.
The new provision will cover the offences related to concealment of income, furnishing the NBR with false audit report and statement, unauthorised employment of foreigners, non-compliance of certain obligations including tax deduction at sources, submission of tax returns, furnishing the revenue board with information as per requirement of tax offices under the income tax law, and the predicate offences related to tax under the money laundering prevention act.
According to the income tax law, there are provisions of imprisonment up to five years with or without fine for the offences.
A senior NBR official told New Age that until the inclusion of the provision, tax officials had no power of conducting enquiry and investigation for prosecution purpose.
They just had power to call any individual, firm, banks and other related bodies for information on tax issues, he said, adding that tax officials would move forward for prosecution based on information and their internal audit on tax files.
Now, DCTs have got the authority to conduct full-pledged enquiry and investigation, in addition to the enquiry already made in forms of collecting information and scrutinising tax files, to gather necessary evidences of offences, he said.
He said that tax officials would be able to conduct physical inspection to places as required.
They, however, will have to obtain prior approval of the commissioner of taxes for executing the provision.
The NBR, however, hardly goes for prosecution for tax offences, officials said.
A very few criminal cases were filed by it against offenders in the history of the
NBR and most of the cases were filed during the emergency period of 1/11 regime, they said.
They attributed procedural complexities and taxmen’s priority of revenue collection rather than prosecution to the lower rate of filing criminal cases.
Field-level tax offices need approval of the revenue board for filing criminal case against any taxpayer and filing case with a special judge court.
On the other hand, tax officials usually pay their full attention on recovery of evaded taxes through administrative process or civil measures instead of criminal procedures for prosecution.
Empowering tax authority with investigation power has become essential for better preparation against tax-related offences particularly after they were empowered with investigation into tax-related offences under money laundering law, officials said.
In recent times, the NBR filed a money laundering case against a taxpayer based in Chittagong.
The authority of enquiry and investigation before filing cases would make the prosecution process effective, they said, adding that without complete investigation, it would be difficult to prove the offences before the court.
The NBR is also planning to set up a separate intelligence unit for the income tax wing like Customs Intelligence and Investigation Directorate and VAT Audit, Intelligence and Investigation Directorate.
The power will act as a preparation for the planned intelligence unit, they added.  

More about:

Want stories like this in your inbox?

Sign up to exclusive daily email