Tax return submission doubled in 4 years: NBR chairman
No alternative to TRP to increase tax revenue, he says
The number of income tax return submissions in the country has doubled in the last four years, said National Board of Revenue (NBR) Chairman Abu Hena Md Rahmatul Muneem on Monday.
"From 21 lakh in 2020, income tax return submissions are projected to reach 40 lakh by June 2024," he said at the NBR's pre-budget discussion with representatives of the Economic Reporters Forum (ERF) at the NBR head office in Dhaka.
Muneem also noted a 2.5-fold increase in VAT registrations, reaching 5 lakh in the past four years.
He expressed dissatisfaction with the ongoing criticism despite this progress. He also highlighted the challenges in bridging the gap between TIN holders and actual return submissions.
"Many hold one-time TINs due to NBR regulations," he explained, suggesting this inflates the overall number without reflecting true taxable income.
He added that the NBR is exploring solutions to address this discrepancy.
Currently, there are approximately 10 million TIN holders in the country, with most mandated to file returns.
The deadline for submitting tax returns typically falls in November. However, due to various factors including the recent national election, NBR extended the deadline without penalty to 31 January this year.
While preliminary estimates showed 35.4 lakh returns submitted by the deadline, the updated figure reached 36 lakh, marking a 21% year-on-year increase. This number is expected to climb further to 40 lakh by the end of the current fiscal year.
The NBR chairman reiterated the importance of the Tax Return Preparer (TRP) system in enhancing direct tax collection despite its recent suspension.
Muneem said, "While there have been temporary obstacles, we remain committed to re-implementing the TRP system. We will pursue all necessary legal avenues to achieve this."
The TRP system, introduced in the last budget to boost tax return submissions, was recently suspended due to a court challenge from tax lawyers who opposed the involvement of third parties in tax collection.
Muneem further addressed ongoing concerns about the country's tax-to-GDP ratio, acknowledging its decline to below 8% in FY23.
However, he highlighted discrepancies in public discourse, stating, "Certain individuals criticise the low tax-to-GDP ratio while concurrently seeking tax exemptions."
According to NBR data, tax exemptions in FY21 amounted to Tk1.26 lakh crore, representing 3.56% of GDP. This figure is projected to reach Tk1.76 lakh crore in the current fiscal year.
The pre-budget discussion also featured presentations by ERF President Refayet Ullah Mirdha, Senior Member Doulot Akhter Mala, and NBR Member AKM Badiul Alam.
ERF submitted 35 proposals aimed at increasing revenue collection and promoting discipline within the sector.