Outstanding income tax exceeds Tk27,582cr

The National Board of Revenue (NBR) is yet collect around Tk27, 582 crore income tax until July this year out of the total outstanding Tk32, 803 crore as was claimed by the audit of the tax offices.

Taxpayers have owed NBR the money through case settlements since the tax year 2010-11.

The outstanding income tax couldn’t be collected as taxpayers and businessmen including MNCs, banks and other companies submitted their incomes and profits through prevarication.

Some taxpayers and companies even went to the Appellate Division, tribunal or court as they were not satisfied with the tax offices’ settlements.

Therefore the outstanding tax has gradually increased. The data was found in the latest statistics of the NBR.

At first, the Deputy Commissioner of Taxes compute and assess the arithmetic errors or incorrect claim in the return and notify the taxpayers to submit the amended return under 88BB (2) while the return is considered to be audited under 88BB (7) if income shown in the return is inconsistent compared to previous year and lack of proper documents and other required papers.

Generally while tax officials are in doubt about the return they select them for audit and take approval to forward them.

According to the Income Tax Ordinance, 1984, the Deputy Commissioner of Taxes shall process the return filed and income shall be computed after making the adjustments in respect of any arithmetical error in the return or any incorrect claim which is apparent from the existence of any information in the return or in any statement or document filed therewith.

The official concerned shall compute tax and any other amount payable under this ordinance on the basis of income computed and determine the sum, payable by or refundable to the assess, after giving credit of the sum paid by way of advance tax including the tax paid at source and the tax paid under this ordinance.

The officials concerned told the Business Post: “The return is taken into consideration for audit based on some incidents according to the ordinance and Income Tax Paripatra 2017-18 where the incidents are fully addressed.

Previous income tax, social status, lack of documentation and proof of every required paper are considered when they are selected for audit. Later, the officials take approval and go through the process.

In most cases they found gaps between income and profit shown in the return, claimed by the officials.

The collected income tax from the audit claim indicates that there is evasion between return submitted and the actual income, they stated.

According to the latest data of the NBR, the board collected income tax revenue of around Tk5, 222 crore till July this year while as per the audit it should have been Tk32, 803 crore since tax year of 2010-11.

The NBR collected around Tk37.31 crore income taxes from the audit claim in just July this year.

Commenting on the matter to The Business Post, Senior Research Fellow of Centre for Policy Dialogue Towfiqul Islam Khan said an appropriate assessment of audit and strengthening audit ability and Alternative Dispute Resolution (ADR) activities can reduce the outstanding income tax.

Lengthy process of case settlement is gradually increasing the outstanding tax amount. So, ensuring ways of faster case settlement and assessment in inaccurate way may help the NBR to increase revenue collection from the outstanding income tax, he added.