10m registered taxpayers by 2023: Muhith

Since the Awami League government’s 2011 tax reforms, the number of taxpayers has tripled and the number of return filers has increased from 900,000 to nearly 1.6 million, he said.

Muhith expressed his hope that this positive trend in tax compliance would continue while setting out the five-year targets.

The government is aiming to raise tax revenue by ensuring tax compliance and punishing tax avoidance and evasion, instead of raising the tax rate.

The government has not increased tax rates for several years, choosing instead to lower them, he said, pointing to the 2.5 percentage point reduction in the tax rate for banks and financial institutions in this year’s budget.

While most taxpayers comply with the law and pay their dues, the government is strengthening the enforcement mechanism against non-compliers, Muhith said.

He proposed the expansion of the penalty regime for non-compliance, increasing the penalty amount, introducing punishments for those who deliberately conceals information or provides inaccurate information to the tax authority, and auditing taxpayers who fail to file withholding tax returns or to provide statements of returns on the salaries and allowances of their employees.

The finance minister said that radical reforms to the tax system are necessary because economic globalisation and the rise of information and communication technology have had a significant impact on taxation systems around the world.

Globalisation has led to restructuring and revising of business models, while ICT has led to digital and virtual businesses that can replace more traditional forms, he said.

The finance minister also spoke of his long-delayed income tax plan, which he hopes to present to parliament at the start of the next financial year.