Tax returns filing rate falling with rise in TIN holders

Jasim Uddin | Published: 22:32, Jan 06,2021

 
 

The rate of income tax returns has gradually been falling over the years proportionately with the amount of electronic taxpayers’ identification numbers although the absolute number of returns filed is increasing.

Out of 50.72 lakh TIN holders in the country as of June 30, 2020, only 47.50 per cent or 24.09 lakh individual taxpayers filed income tax returns in the current fiscal year 2021, according to the National Board of Revenue data.

A total of 26.63 lakh or 52.41 per cent of the TIN holders did not file tax returns, the data showed.

Only 1.44 per cent of the country’s 16.75 crore population filed tax returns in the year.

Officials of the revenue board said that the rate of tax returns submission had been declining because of significant increase in the number of TINs issued for procedural requirements by various agencies.

Although the NBR had made tax returns submission mandatory for all TIN holders, with a few exceptions, from the current fiscal year to improve the situation, most of the TIN holders evaded filing returns, they said.

They said that there might be various reasons behind the situation, including the fact that many TIN holders did not have taxable incomes.

The number of tax returns filed has not been increasing as per expectation, they added.

In the last FY2020, around 54 per cent or 22 lakh TIN holders submitted tax returns when the total number of TIN holders in the country was 40.60 lakh.

Some 58 per cent or 22 lakh taxpayers filed returns in FY2019 although some 38 lakh individuals had been issued TINs until June 30, 2018.

Given the context, the revenue board has decided to take legal action against non-filers of returns, a senior tax official on Wednesday told New Age.

He said that field-level tax offices would serve show-cause notices to new TIN holders who had not file tax returns and seek explanations.

The offices will impose fines and take other legal steps for not filing tax returns against those who were TIN holders and had filed returns in previous years, he added.

According to Article 124 of the Income Tax Ordinance-1984, a deputy commissioner of tax may impose penalty amounting to 10 per cent of the tax imposed on last year’s income of the taxpayer or Tk 1,000, whichever one is higher, for his/her failure in filing returns without reasonable cause.

A DCT will also impose a further Tk 50 in penalty for each day of delay after the deadline.

For new e-TIN holders, the penalty amount will be at the highest Tk 5,000 for failure in filing tax returns, according to the ordinance.

In case of old individual taxpayers, the penalty amount will be 50 per cent of last year’s payable tax or Tk 1,000, whichever is higher.

A DCT can impose the penalty after issuing notice and giving the taxpayers an opportunity to explain.

Field-level officials said that it was very difficult to trace the non-filers for various reasons, including change in address and use of fake contact numbers in TIN application.

A large number of TIN holders, mainly women, do not file returns as they do not have taxable incomes, they said.

As per law, people who do not have taxable incomes but have obtained TINs for selling land and obtaining credit cards are exempted from filing returns.

Educational institutions which receive government benefits under monthly payment order, public university and funds, and nonresident individuals with no permanent establishment or no fixed base in Bangladesh are also exempted from filing income tax returns.

A DCT at a zone in Dhaka told New Age that he had recently served notices to 2,500 TIN holders for not filing returns in FY20.

Of those, more than 1,200 notices had been returned as the TIN holders were not found at the addresses, he said.

 

Fiscal Year           No of TIN holders (until June 30) -- No of tax returns  -- Percentage of submission

2017-18                29.23     18.35     63

2018-19                38           22          58

2019-20                40.60     22           54

2020-21                50.72     24.09     47.50

Source: NBR data, (Figures in lakh)

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