Tax return filing crosses 30 lakh for first time
The number of people who filed tax returns in fiscal year 2022-23 has crossed 30 lakh for the first time.
Credit lies in the tax authority's increased efforts to expand the tax net through various policy measures and rising awareness among taxpayers.
Until April this fiscal year, the National Board of Revenue (NBR) received 31.7 lakh tax returns from taxpayers, mainly individuals, which was 22 per cent higher from that filed in fiscal year 2021-22.
The latest growth is the highest in five years, with taxmen linking the surge to the introduction of a new rule requiring people to file their income, expenditure and wealth statements to avail 38 types of services.
Among others, people have to furnish proof of submission of returns (PSRs) or acknowledgement receipts of return filing to avail loans of over Tk 500,000 from a bank or financial institution.
The proof is also necessary for obtaining or maintaining a credit card, opening postal savings accounts exceeding Tk 500,000 or purchasing state sponsored savings instruments, known as "sanchaypatra" in Bangla, of over Tk 500,000.
People who open and continue using bank accounts of any sort with a credit balance of over Tk 10 lakh also needed to submit tax returns and submit acknowledgement receipts or tax certificates, among others.
"The requirement of the PSR has driven the growth of tax returns," said a senior NBR official, expecting that overall return may grow to 35 lakh at the end of this fiscal year, meaning June 30.
Awareness rose among people because of tax fairs held annually, contributing to the steady growth of tax return and compliance, said taxmen.
Policy measures also contributed, such as introduction of rules making it mandatory to avail taxpayer identification number for public and private sector employees, who earn Tk 16,000 or more, they said.
A lot needs to be achieved, said Nasiruddin Ahmed, former chairman of the NBR.
Still, the total number of tax returns submitted is just over one-third of the total number of people who have taxpayer identification numbers (TIN), he said.
As of April this year, the total number of registered taxpayers was around 88 lakh, according to the NBR.
Besides, a large number of people who have taxable income are out of the tax net.
Efforts to expand the tax net needs to be strengthened, said Ahmed, suggesting for increased automation and connectivity among the government's various agencies so that they can share and cross-match data to identify people with taxable income.
The requirement of the PSR for certain services has helped expand the tax base, although many people do not have taxable income, said Aminur Rahman, a former member of income tax policy at the NBR.
He said many people, such as pensioners and housewives, have savings certificates and the amount of investment has risen cumulatively over time.
Now, as they file tax returns to comply with the rule of submission of tax returns, they may not be able to explain the sources of their funds as they may not have the records, he said.
They may have to pay high taxes if they fail to explain the sources of their fund. In this case, the government can offer an immunity to people in the lower income tier from explaining the sources of funds up to a certain amount, he said.
The government should also take measures to provide support to low-income taxpayers in preparing their tax returns. Automation and scope for electronic return filing can be helpful in this regard, he said.