Income tax return filing to be mandatory for all TIN holders

The government is going to make the filing of income tax returns mandatory for all Taxpayer's Identification Number (TIN) holders, with some exceptions, from the next fiscal year 2020-2021.

Currently, there is a flexible provision regarding filing income tax returns for those without taxable income, which will be scrapped in the upcoming budget.

According to the income tax law, submitting income tax returns is compulsory for taxpayers who have taxable income or were assessed for tax in any of the immediate past three years.

Finance Minister AHM Mustafa Kamal may propose bringing about some changes to sections 75 and 184 of the Income Tax Ordinance-1984 in the upcoming budget to be placed on Thursday.

According to the National Board of Revenue, there are around five million TIN holders in Bangladesh. Of them, about 2.2 million submitted their tax returns in the current fiscal year.

Sources at the finance ministry said the government is going to make the income tax return submission mandatory for all TIN holders to expand the tax net and encourage taxpayers to submit their returns regularly.

Many TIN holders have avoided submitting tax returns – taking advantage of general "ifs and buts" of rules related to the submission of tax returns.

The new provision is hoped to significantly increase the number of tax returns in the country.

Income tax ordinance section 75 states, "The submission of an income tax return shall not be mandatory for educational institutions receiving government benefits under monthly payment order, public universities and fund (provident fund) and non-resident individuals having no permanent establishment or no fixed base in Bangladesh."

People should obtain a TIN when selling land and getting credit cards, but those who do not have taxable income may only get a waiver from the submission of income tax returns.

Currently, obtaining a TIN is mandatory for persons and firms to obtain at least 33 services, including: opening letters of credit; getting credit cards and bank loans above Tk5 lakh; obtaining membership in trade and professional bodies; owning membership of registered clubs and trade bodies; obtaining licences for trade, import and export; obtaining registration and renewal certificates for motor vehicles; participating in tenders, elections and supplying goods; plus submitting bills of entry for export and import.

Holding a TIN is also mandatory for government employees getting a basic salary of Tk16,000 and above, employees holding executive or management positions in businesses or professions, and getting commercial gas and electricity connections in a city corporation or municipality.

The submission of tax returns is also mandatory for some other specific groups of people or entities such as a company, non-government organisations, cooperative societies, firms, plus associations of persons and shareholders of a company.

Among others, the following individuals must submit tax returns: car owners, people who run businesses and professions with trade licences; people registered with professional bodies of doctors, lawyers, chartered accountants, engineers, or surveyors; and people who participate in tenders.

People with no taxable income, who are required to obtain TINs for selling land or obtaining credit cards, will be added to the list of exempted individuals, according to finance ministry officials.