Kamal proposes formulating rules for tax return preparers
Finance Minister AHM Mustafa Kamal today proposed formulating rules for authorising tax return preparers (TRPs) in Bangladesh with a view to expanding the tax net by adding more individual taxpayers.
"Following the various models of developed countries, I suggest formulating rules for the authorisation of TRPs to expand the tax net through new individual taxpayers," he said in his budget speech.
"We hope that through the e-return submission platform, the TRPs will be able to make submissions of a lot of new income tax returns considering the rising number of people holding tax identification numbers (TIN)," Kamal added.
TRPs help new taxpayers file their tax return in a bid to increase compliance and narrow the gap between registered taxpayers and regular return filers.
Compared to other developing and developed countries, the tax to gross domestic product (GDP) ratio of Bangladesh is not that encouraging.
It is essential to raise our tax-GDP ratio significantly in order to support our graduation to a developed country, the finance minister said.
"We need to expand the tax net by bringing all eligible citizens within the tax net, which will in turn enhance our capacity to tap more revenue and expand the size of the formal economy," he added.
The number of taxpayers in the country that hold ETINs currently stands at around 88 lakh.
As a result of taking some practical initiatives in last year's budget proposals, the number of submitted income tax returns increased by 25 per cent in the current financial year compared to a total of 32 lakh in 2021-22.
"But the number is still not as expected," Kamal said.
If the TRPs can bring new taxpayers to the system, they will get a commission from the National Board of Revenue (NBR) on the tax paid, said a senior official of the NBR.
He went on to say that the practice of employing TRPs is prevalent in countries like the US and Australia.
According to the plan, the NBR will offer a 10 per cent incentive on the minimum tax to be paid by first-time tax return filers.