2020-09-13 02:48:57 BdST
NBR expects big rise in corporate tax revenue
The tax authorities are hopeful about a substantial increase in corporate tax returns this year as they have put in place a number of measures to rope in the tax-evading companies and the companies that submit fake audit reports.
They also expect a notable increase in tax revenue earnings because of the latest actions, said a senior tax official.
Currently, nearly 35,000 out of 78,000 TIN (taxpayer identification number) holding companies submit tax returns to the National Board of Revenue (NBR).
The official said a high-powered task force recently found the existence of some 176,000 firms that are duly registered with the RJSC or Register of Joint Stock Companies.
Of them, 88 percent have obtained registration between 1991 and 2020 and those are still in operation.
The task force has found that most of these registered companies seek loans from banks and purchase assets but they do not file tax returns, he added.
"We've identified and made a list of those tax-evading companies to gradually bring them under the tax net," he added.
As per the income tax ordinance, obtaining TIN and submission of returns is mandatory for all companies to run their business activity.
The tax official suspected that the companies might use fake TINs to run their operations.
He said the NBR would identify the companies with the support of the RJSC and the Institute of Charted Accountants of Bangladesh (ICAB).
The central intelligence cell (CIC) of the NBR formed a seven-member task force to bring all registered public and private limited companies under the tax net.
The team was also tasked to find fake TIN-holding companies and track down the companies that submit fake audit reports.
According to a previous NBR study, more than 56 percent of the firms did not have TINs and over 55-percent of the TIN-holding companies do not pay income tax.
It also found that more than 50 per cent of the firms filed fake reports, although submission of financial audit reports with income tax returns is mandatory.
More than 50 percent firms, which filed income tax returns, have provided fake reports in the last fiscal year (FY), NBR officials said based on the ICAB data.
Members of the ICAB signed some 17,000 audit reports in FY 2020 while the number of returns was 35,000.
To find fake audit reports, the ICAB has prepared an app through which the taxmen or any other people can verify the authenticity of an audit report.
A delegation of the ICAB visited the NBR on Tuesday to give a presentation on the software.
According to officials, corporate tax compliance has remained poor for years in the absence of a proper initiative by the government.
The NBR, for the first time, formed such a task force focusing on increased corporate tax compliance.
The task force will prepare a work plan, identify the problems behind non-compliance and also recommend a solution to the problems.
Members of the task force said they are collecting data from the RJSC and the ICAB and moving forward based on the database.
It will also craft a strategy to check fake audit reports.
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