National Board of Revenue has in principle decided to give cash refund of income tax paid in excess amount by taxpayers to build up taxpayers’ confidence in the tax authorities.
Officials said that NBR would initially speed up the process of refund in small amount to cover the large number of taxpayers.
Income tax wing of NBR has already reconstituted the tax refund monitoring committee, headed by its member (income tax policy) Kanon Kumar Roy, to accelerate the process, they have said.
The committee, reconstituted on December 13, would recommend, among others, risk-based refund process so that NBR could expedite the process of refund in small amounts to small taxpayers like salaried persons and small businesses, they added.
NBR in October 2012 formed the committee to expedite refund process for taxpayers having salary income.
The committee has been reconstituted following a decision made at a meeting between NBR and Bangladesh Investment Development Authority where prime minister’s SDG affairs principle coordinator Abul Kalam Azad was present.
Currently, taxpayers hardly get any cash refund of income tax they paid in excess due to procedural complexities of refund system and tax officials’ ‘negative mindset.’
NBR now regularly provides the refund money only to defence officials while some large businesses also manage to get refund, officials say.
Field-level tax officials are found reluctant to refund money fearing mistakes and misuse, they say.
According to Income Tax Ordinance-1984, a taxpayer is entitled to get refund if he or she pays tax in excess.
For many taxpayers, the total paid tax amount exceeds the total tax liability by the end of the fiscal year as tax officials all the year deduct income tax in advance at sources like import, payment of salary, bills and interest income.
The tax liability of taxpayer also becomes less than paid tax after he or she claims tax rebate for investment.
As per tax law, taxpayers may also adjust the refundable amount with applicable tax in next fiscal year or they can claim refund in cash.
Officials say that the refund process was also very complex and lengthy.
As per process, a taxpayer needs to apply to a deputy commissioner of taxes for getting refund.
The DCT can approve a refund application having involvement of only Tk 5,000 or less after crosschecking the applicant’s income tax returns, previous years’ record and other documents to be sure whether the applicant has any dues to the tax authorities.
DCT issues a refund voucher in favour of the applicant if he becomes sure about the refund.
The refund voucher is also needed to be approved by Office of the Controller General of Accounts.
Then, the taxpayer needs to visit a treasury branch of Bangladesh Bank to encash the voucher and he gets the payback if Bangladesh Bank approves the voucher.
Income tax commissioner, who is the head of a field office, can settle a refund application involving below Tk 5 lakh.
The revenue board settles the refund claim worth above Tk 5 lakh.
According to NBR, the reconstituted committee would monitor the refund giving process and collect refund data from field offices.
It will also evaluate the progress visiting the field offices and arrange view exchange meetings with stakeholders.
Income tax commissioners will also monitor the activities related to refund at their offices.
NBR every year on an average gives refund worth around Tk 100 crore, officials said, adding that the refundable amount would be much more higher as NBR deduct tax in advance from 57 sources while most of the taxpayers claim tax rebate for
The tax authorities, however, have no statistics of refundable tax paid in excess by taxpayers.
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