Home ›› 17 Jun 2023 ›› Back
For the first time, the government has incorporated a provision in the new Income Tax Act-2023 for deregistration of tax identification number (TIN).
According to the draft of new Income Tax Act-2023, tax returns must be submitted with a minimum of Tk 2,000 despite having no taxable income, only if they have TIN certificates.
In such case, taxpayers will face fines and penalties if they fail to submit returns and pay minimum tax.
Currently, it is mandatory for taxpayers to submit tax returns as per the existing ordinance. But under the new provision, taxpayers will get an opportunity to apply to the tax authority for deregistration of their TINs by showing valid reasons from the fiscal year 2023-24.
“Deregister” simply means to cancel or discontinue with the existing taxpayers’ identity. Over the years, taxpayers or TIN-holders have registered with the National Board of Revenue (NBR) for becoming eligible to be issued with a TIN or liable for a tax.
Though taxpayers were bound to get TIN certificates for receiving some government services, the taxpayer identity may not be relevant currently after a specific period for not being able to pay taxes.
From the current fiscal year, the government has made the income tax return filing proof mandatory for TIN-holders to obtain 38 services, including opening and maintaining bank accounts as well as utilities.
After incorporating such provision, they are bound to submit tax returns. Around 8 lakh taxpayers submitted their returns with zero tax as they had no taxable income.
But due to the new provision incorporated in the income tax act, taxpayers will have to pay minimum taxes despite having no taxable income. Deregistration provision will help them to be free from the obligation and face penalties.
TIN could be cancelled on such conditions: If taxpayer dies or if there is no taxable income or non-resident foreign nationals who have no permanent base in Bangladesh or if TIN certificate has been accepted for any special reason and there is no taxable income now.
Besides, men and women above 65 years can cancel TIN if they don’t have taxable income (previously they have taxable income, but there is no at present).
They have to apply to deputy commissioners of taxes or commissioners of taxes to deregister TIN, citing valid reasons. But they have to prove that they had no taxable income for last three consecutive fiscal years.
When they will submit application, they have to attach a copy of TIN certificate, a receipt or certificate of previous income tax return and a photocopy of national identity card.
Deputy commissioners of taxes or commissioners of taxes will cancel TIN after scrutinizing all documents and income statements.
Over the years, the number of e-TIN holders is increasing, but the number of assessees filing tax returns is significantly lower. In the fiscal year 2021, total e-TIN holders were 76 lakh whereas only 26 lakh taxpayers submitted tax returns representing only 31 per cent of e-TIN holders, and in the current fiscal year, approximately 32 lakh returns were submitted whereas total e-TIN holders are 86 lakh which represents only 37 per cent of e-TIN holders.
Snehasish Barua, director at Smac Advisory Service Limited said, “There are lots of liaison offices and branch offices which have not extended their registration after expiration of their approval from Bangladesh Investment Development Authority.
“These branch and liaison offices get final tax clearance from NBR in many cases. Some private limited companies opt for winding up. Moreover, there are a lot of dormant companies which don’t file any statutory returns. The provision will help them as well.”
Besides, he said, the authority will be able to track down who are active e-TIN holders and responsible for filing tax returns. Individuals can relieve themselves from being unnecessarily chased by the authority for filing tax returns. Incorrect e-TINs can be corrected through this process. It will reflect a proper ratio of filers, he added.
“E-TIN holders may opt for deregistration to avoid tax return submissions. Administrative workload will increase in order to minimise fraudulent applications. Authority may lose potential tax due to deregistration. Physical contact with the authority may increase the chance of bureaucratic issues,” he said.
An official said the provision will help those whose TINs are opened fraudulently by others. A rickshaw-puller faced someone buying a car with his TIN which is opened by rickshaw-puller’s NID. In such cases, victims can apply to deregister TIN in the tax office, he said.
Tax return proof must to get 5 more services
All organisations, including trusts, funds, foundations, non-governmental organisations (NGOs), microcredit organisations, and societies and cooperatives, may be required to show proof of tax return submission in the upcoming fiscal year while opening and maintaining bank accounts.
Besides, homeowners in city corporation areas will have to submit their income tax return proof while renting or leasing their houses.
Individuals will also be required to show this proof during application for getting design approval for building in all city corporations and municipalities.
The government plans to bring suppliers or service providers under this provision during the supply of goods or services as well as vendors or deed writers of stamps, court fees, and cartridge papers while obtaining registration or renewing licences.
