Chartered accountants yesterday expressed concerns that taxpayers might face harassment under a provision included in the tax law that requires employers to file a statement about the return submission of their employees by April 30 each year.
The National Board of Revenue (NBR) is seeking to include the provision in the upcoming fiscal year.
The provision will make it mandatory for every private sector employee to submit by April 15 every year the taxpayer's identification number, the date for tax return filing and the serial number provided by the income tax administration after the filing.
Then, the employers will have to send the statements on returns filed by their employees by April 30. Employers will come under auditing taxmen if they fail to submit the statement.
“This provision might turn into a source of harassment for many taxpayers,” said Dewan Nurul Islam, president of the Institute of Chartered Accountants of Bangladesh (ICAB), at a programme at its office in Dhaka.
Citing the proposal in the budget, Islam said failure to file such a statement by any of the employees will attract disallowance of salary expense of the respective employee in the hands of employer.
Taxmen said companies will have to pay tax if they don't submit the statement about their employees' tax return filing by the deadline.
ICAB Council Member Md Shahadat Hossain said it will be difficult for many small firms to comply with the rule because of a lack of resources.
Problem will also arise if an employee leaves, he said.
"This is very complicated and cumbersome,” he said, adding that the rule of furnishing statement of return submission would not be applicable for government employees. Islam said the authorities should explore new avenues to collect revenues instead of increasing tax burden on compliant enterprises.
“Emphasis should be given on attracting private sector investment, increasing the capacity of the NBR, and identifying areas to widen the tax net.”
NBR Chairman Md Mosharraf Hossain Bhuiyan said the tax proposals have been framed in order to boost compliance and boost tax collection.
“The number of non-compliant citizen is very high in the country. They have to be brought under the tax net,” he said.
Bhuiyan said the NBR would be tough on non-compliance from the next fiscal year.
“We do not get expected amount of tax from healthcare and diagnostic centres. We will get a good amount of taxes if we can increase compliance,” he said.
Bhuiyan also responded to the criticism for reducing the corporate tax for banks and financial institutions.
He said the benefit has been extended to the banking sector, which provides the highest amount of tax. “We have given commitment to cut corporate tax. We have started reducing it and we will consider slashing corporate tax rates for others as well,” he said.
ICAB Council Member Md Humayun Kabir also spoke.