More than half of the registered taxpayers did not file returns

According to the National Board of Revenue’s latest data, out of 5.6 million taxpayers who have registered in the last fiscal year (2020-21), 31.69 million taxpayers did not file income tax returns.

Meaning 56.60% of the registered taxpayers did not file tax returns.

So, this time, the NBR is thinking of taking legal action by identifying the people who have not submitted their returns by issuing notices.

In an interview with Dhaka Tribune regarding the matter, NBR member (income tax policy) Alamgir Hossain said that they want to increase the habit of filing income tax returns and have taken initiatives for this in two ways, through creating awareness and legally. 

According to the law, those who have not filed a return will be given notice initially. Since there is a rebate in filing income tax returns in some places, they will be asked for explanations. 

“We need to know if they fall into that category. If not, legal action will be taken against them. Field level officials have already been given such instructions,” he also added.

However, the number of returns filed by individual taxpayers is increasing every year. In the fiscal year 2020-21, a total of 2.36 million taxpayers filed income tax returns in the country.

This figure is about 15% more than the previous financial year. According to the NBR, the number of returnees in the 2019-20 financial year was 2.11 million.

According to Alamgir, throughout the entire last financial year, the number of return submissions and revenue collection has increased during the pandemic but not at the desired level. 

According to NBR sources, as per the rules, a taxpayer has a legal obligation to file a return on time every year. Returns have to be submitted by November 30 of each year. If anyone cannot file the tax return, the reason for that must be stated.

The NBR has been conducting various promotional programs including an income tax fair in November every year to build awareness.

However, the income tax fair could not be held last year due to the pandemic.

Meanwhile, in the 2020-21 financial year, a record 19% growth has been made in the collection of duties, value-added tax (VAT) and income tax, of about Tk 2,59,900 crore.

Of this, the collection of NBR in the areas of income tax, VAT and customs was respectively TK 85 thousand 391 crore, TK 97 thousand 509 crore and about TK 77 thousand crore.

Although the growth was satisfactory, the target deficit was TK 41,000 crore.

Legal consequence of not submitting returns

If a taxpayer fails to file an income tax return within the time prescribed under Section 75 of the Income Tax Ordinance, they will be liable to a penalty under Section 124 of the Income Tax Ordinance, 50% additional simple interest as per Section 73 and late interest as per Section 73 (a).

Again, the taxpayer can submit the return within the time fixed by the Deputy Commissioner of Taxes by applying for the time for filing the return. In that case, no penalty will be imposed on the taxpayer. However, additional simple interest and late interest will be charged.

On the other hand, if a person does not file a return for several years in a row, he may be fined TK 50 per day for the entire period of time as long as they do not file a return. However, if the taxpayer is new, the total amount of the fine will not exceed more than TK 5000. But for regular taxpayers, the amount might be as high as 50% of the amount of income tax that was incurred in the previous year.