The government mulls making online tax return submission mandatory for all salaried taxpayers from next year, said Md Alamgir Hossain, income tax policy member of the National Board of Revenue (NBR), on Saturday.
The revenue authorities are working to make a user-friendly online system and the final demonstration of online return filing modules is expected to be held in February next, he added.
While addressing a workshop on tax return filing on the Economic Reporters Forum (ERF) premises, he said the new system will be accommodated with online payment system to deposit the tax.
The tax authorities are also thinking about bringing down the rate of withholding tax or tax at source in the budget for upcoming the fiscal year, he mentioned.
The ERF and Golden Bangladesh – a non-government organisation on tax matters – jointly organised the programme for economic reporters.
Alamgir Hossain hoped the new initiative will be more popular among taxpayers.
Asked about this, he told The Business Standard, "The new initiative will make tax return submission hassle-free, less time consuming and cost-effective."
Currently, the NBR has suspended the online return filing facility, except for tax zone-6, due to some technical glitches in the system.
"We've been working to make the system more user-friendly. However, we could not make online tax return submission popular due to some complexities in the system," Alamgir said, adding that even many tax officials did not submit their income tax returns through the online system.
The revenue authorities have failed to make all people who are not submitting tax returns despite having taxpayers' identification numbers (TIN) to pay tax owing to manpower and resources constraints.
He hoped that an expansion of the tax net will create opportunities for reducing tax rates.
Md Jahangir Alam, Chief Executive Officer (CEO) of Golden Bangladesh, said they are ready to extend all cooperation to the ERF members to fill-up their tax returns and other tax-related services.
"We are ready to provide free-of-cost services to the ERF members on tax matters," said Alam, who is also a tax lawyer.
He said his organisation is working to develop tax culture and build awareness on payment of taxes.
ERF President Sharmeen Rinvy said taxpayers have to bear additional costs for taking assistance on tax return filing as it is not easy for them.
She, therefore, urged the NBR to simplify tax returns procedures and reduce harassment for encouraging people pay tax.
ERF General Secretary SM Rashidul moderated the workshop.
Alamgir Hossain of the NBR said the number of tax return filers remain around 2.2 million, which is around 1% of the country's population.
"We could not popularise the tax return filing by taking necessary measures," he admitted.
To simplify the tax return submission procedure, the NBR has started drafting a new direct tax law and its first draft is likely to be placed for stakeholders' opinion by June next, he said.
The new law would be drafted in Bangla where taxpayers will find details on return filing in one chapter, he added.
He also said taxpayers' dependency on income tax practitioners or tax lawyers will be reduced to a great extent after once the new law is enacted and put in force.
Mentioning that the direct tax to GDP ratio remained stagnant in respect of the country's per capita income and household expenditures, he hoped the tax net would be expanded if the NBR could simplify tax return submission process.
The NBR would be able to bring down to the existing tax rate with the expansion of tax net, he said.
The NBR has also moved to digital transformation of taxpayers' services and expansion of out-reaching activities.
On the allegation of harassment, he said a negligible part of total income tax files are selected for auditing.
He said taxpayers need to feel the necessity of tax payment for the sake of the country's development.
The government has offered the opportunity to declare undisclosed income by paying 10% tax, Alamgir Hossain said, adding taxpayers having undisclosed income should utilise this opportunity to avoid future hassles on tax matters.
He further said the time for tax return submission has been extended until 31 December to facilitate taxpayers avoid gathering amid the Covid-19 pandemic.
There is always a tendency among people to rush in the last minute to submit tax returns in the tax offices, he observed.