New taxpayers: the NBR relaxes the rules on one-time assessment

The National Board of Revenue (NBR) has expanded and relaxed the rules to place new taxpayers under the tax net by assessing their income on the spot.

Thus, the tax authority will be able to register new taxpayers through ad hoc assessments from the next fiscal year, expanding its scope from shopping centers or shopping markets to identify businesses and professionals who, despite their taxable income, still remain outside the net.

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At the same time, the BNR offered businessmen and professionals the opportunity to show five times the capital of their taxable income if people regularly pay taxes.

The tax authorities will not raise any questions as to the origin of the capital, according to the 2022 finance bill tabled by the Minister of Finance for the next financial year.

“We provide the opportunity to encourage people to declare and enter the tax net,” a senior NBR official said.

The move comes as the tax collector finds that many people still remain outside the tax net even though they have taxable income.

Various stakeholders, including leading chambers, have called on the NBR to cover more people to increase the collection of income tax, which accounts for 32% of total government revenue.

In his budget speech, Finance Minister AHM Mustafa Kamal said that Bangladesh has a middle class population of around 4 crore but most of them do not pay income tax.

He said his ministry was working to increase the number of registered taxpayers to 1 crore from the current 75 lakh, of whom only 29 lakh filed returns in March 2022, according to his budget speech.

The NBR said it will issue guidelines regarding the one-time evaluation.

The tax official said the NBR had not conducted field surveys for the past two years due to the coronavirus pandemic. He collected secondary data from agencies, such as the Bangladesh Road Transport Authority and the National Savings Authority, to find new taxpayers.

“We will also give importance to the timely assessment to bring more taxpayers under the net from next fiscal year,” he said, adding that the tax authority would detail this in the tax circular to be issued. later.

Snehasish Barua, partner at Snehasish Mahmud & Co, an accountancy firm, said the new rule is likely to encourage small entrepreneurs who have not declared their initial capital so far.

If someone shows an annual income of Tk 5 lakh and pays tax of Tk 15,000, he will be able to show Tk 25 lakh as his initial capital.

“So this is an opportunity for small traders who haven’t declared their capital yet,” he said.

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