Row over NBR's plan to introduce TRPs

FE Team | Published: January 24, 2024 20:23:37

The row between the National Board of Revenue (NBR) and tax lawyers over the former's incorporation of tax return preparers (TRPs) in the tax collection system may end up doing anything other than helping motivate taxable people outside of the tax net to submit tax returns. If the NBR banked on the deployment of TRPS the way banks have made use of agent banking, for expanding its tax net, it has already met with a reversal. This is because the Tax lawyers' associations have filed with the High Court (HC) a writ petition against the NBR rules made exclusively with the aim of bringing uninitiated revenue payers under the tax net. Taking cognizance of the lawyers' grievance, the HC has issued a stay order on the written test the NBR was scheduled to hold for recruitment of TRPs. Under the stay order, the NBR cannot start the process of recruitment for long six months unless its appeal successfully counters the lawyers' writ petition.
The NBR's TRP brigade was supposed to go about angling fresh taxpayers from this year. But their recruitment did not come about earlier. The Bangladesh Tax Lawyers Association and Dhaka Taxes Bar Association submitted the writ petition on January 10 leading to the stalling of the recruitment test. Either way, the TRPs would hardly be of any use this year because of the inordinate delay the NBR made to initiate the process. January 31 is the last date for submission of tax returns and this is after two months' extension of the deadline. Clearly, the NBR did not do its homework and it can blame none but itself for the imbroglio it now finds itself in. However, the TRPs can be useful, if of course they deliver according to the set guidelines and not resorting to excesses. After all, there is a temptation to go for excesses when their income will depend solely on their commission from the amount new tax payers pay in taxes. At no point should they pretend to be taxmen themselves, rather the drive's success will depend on how friendly they can persuade taxable people outside of the tax net. Well, intimidation may sparingly be used for the purpose.
Clearly, both the NBR and lawyers' associations have points in their favour. The most important issue here is the national interest---one that can be served well if the untaxed and perhaps unbanked taxable people can be brought under the tax net. If the TRPs are deployed at the grassroots level to explore and attract such people not quite familiar with the complexities of tax return, their service is unlikely to hamper the professional tax practitioners who usually have salaried people, corporate houses and business entities as their clients in matters of submission of tax returns. That they have felt threatened by the NBR's move to deploy TRPs seems to a large extent to be out of place. Banks have been doing business at the grassroots level through agent banking. So can the TRPs, as agents of the NBR, do.
However, if the TRPs become more ambitious--- which some of them are unlikely to resist--- than the area assigned to them, they surely can take away some clients from the lawyers. But this hardly ought to be a cause for concern. If the NBR collects more revenues, the target of which is never met, the entire nation benefits from it. Where things, however, may go awry is the malpractices and aberrations involving agents deployed with the task of expansion of the tax net. If they so wish, they possibly can bargain for a larger share than the commission they were supposed to receive with parties unwilling or untaxed at the grassroots level. Unless their activities are closely monitored, the chances of blackmailing or arranging mutually beneficial deals cannot be ruled out.