Acknowledgement receipt – issued by the National Board of Revenue (NBR) as proof of income tax return submission before a certificate is ready – reveals the taxpayer’s gross wealth, taxable income, and tax paid, inadvertently disclosing such confidential information to third parties.
Experts say this is a violation of the Income-tax Ordinance, 1984 and Income Tax Law 2022 (Draft).
Meanwhile, taxpayers are concerned over facing harassment from banks, insurance firms, and other authorities such as trade licence issuers, because when certificates are unavailable, the acknowledgement receipt is a must to avail a number of important services.
The Protection of Information under the Chapter XX of the Income-tax Ordinance, 1984, reads, “Save as provided in this section, all particulars or information contained in the following shall be confidential and shall not be disclosed, namely: (a) any statement made, return furnished or accounts or documents produced under the provisions of this Ordinance.”
Meanwhile, according to The Income Tax Law 2022 (Draft), submitted return, statement of details, proof document under the provision of law shall be confidential and shall not be disclosed.
Ashik Shourav, who works at a private company, said, “I am worried about publishing my personal information – which is confidential – to third parties while submitting the acknowledgement receipt. I do not want to receive any unsolicited financial proposals.”
Another person, on condition of anonymity, said, “An official asked me to submit my return submission proof so that my electricity supply can continue. I am already suffering harassment from people offering me unsolicited credit offers.
“I am concerned that if I disclose my earnings and total income to other parties, I will face even more harassment. People do not disclose their financial situation to even their close ones, why should we disclose such sensitive information to unauthorised third parties?”
Responding to a query, a NBR official on condition of anonymity told The Business Post, “If anyone prefers not to disclose their confidential information, they can submit a return certificate in accordance with the Finance Act, 2022.”
“According to section 82D of the ordinance, assessment is required to assess the tax liability of a person. This is the reason the acknowledgment receipts mentions how much a taxpayer earns and how much tax they are paying. The certificates do not have such confidential data.”
A number of taxpayers say though the return submission certificate does not have any confidential data, it is much harder and time-consuming to get. So, many are forced to rely on the acknowledgement receipt.
Bankers say the acknowledgement receipt helps them pitch their deposit and credit schemes to customers who are eligible, and allows achieving monthly sales targets more easily. They added that the banks are now asking for tax return submission receipts unofficially.
A tax consultant said “Taxpayers can hide their confidential information mentioned in the acknowledgment receipt. Because banks and other authorities need return submission proof, not taxpayer’s net worth.”
He ensured that banks assess the receipt with scanning QR code and TIN related proof. So hiding confidential information is not a problematic issue. “Taxpayers are harassed because they do not know the system,” he added.
An NBR official admitted that the taxpayers could face harassment because of the receipt mentioning confidential data. “We will speak with senior officials to see whether anything can be done to fix this issue,” he added.
Addressing the concerns, NBR member (Income Tax Policy) Md Shamsuddin Ahmed said, “Taxpayers can go with the return certificates if they fear harassment due to submission of the acknowledgment receipt.
“We will fix any issues faced by the taxpayers. Submission of income tax return proof have been made mandatory for a number of sectors from this year, and we are getting a good response from the taxpayers.”
He added, “Sometimes, as an initiative is launched, problems can arise. So, if we get objections from the taxpayers about the data mentioned in the acknowledgement receipts, we will fix the issue.
“Because disclosing a taxpayer’s worth and income is not very important, rather the important thing is to increase the number of return submissions.”
According to the Finance Act, 2022, a person shall be required to furnish a proof of submission of return in the cases of applying for a loan exceeding Taka five lakh from a bank or a financial institution; becoming a director or a sponsor shareholder of a company; obtaining or continuing an import registration certificate or export registration certificate; obtaining or renewal of a trade license in the area of a city corporation or paurashava.
It is also mandatory for Obtaining registration of co-operative society; obtaining or renewal of license or enlistment as a surveyor of general insurance; obtaining registration, by a resident, of the deed of transfer, obtaining or maintaining a credit card; obtaining or continuing the connection of electricity in a city corporation or cantonment board and a sort of important cases in daily life are required to submit proof copy of return submission.
According to the NBR, the submission of income tax returns jumped to 50,532 in July this year, up from 14,743 in the same period last fiscal year. Mandatory showing proof of return submission has caused a boost in the number of return submissions.