Top business leaders urge government's revenue authority to immediately suspend or withdraw its recent directive on conducting on-site inspections of business premises and verifying documents under the income-tax law.
In a joint letter sent to the National Board of Revenue (NBR) Chairman on July 22, the presidents of eight leading business organisations vented deep concern over the NBR's July 19 notice as it created "fear and panic" across the country's production and services sectors.
The signatory trade bodies are the International Chamber of Commerce Bangladesh (ICC Bangladesh), Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka Chamber of Commerce and Industry (DCCI), Chittagong Chamber of Commerce and Industry (CCCI), Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA), and Bangladesh Chamber of Industries (BCI).
"The Constitution of Bangladesh, particularly Articles 31 and 42, guarantees the rule of law and protects the legal rights of citizens," the business leaders said by one voice.
They argue that most entrepreneurs -- from small businesses to large industrial enterprises -- remain unfamiliar with the provisions of Section 147, as the law has yet to be implemented in practice.
Introducing on-site inspections without adequate awareness or consultation, they have said, has created widespread uncertainty among taxpayers.
The signatories have further argued that the proposed inspections could conflict with existing legal safeguards, including the Companies Act 1994, which protects the confidentiality of corporate records, and the Bangladesh Investment Development Authority (BIDA) Act 2016, which aims to facilitate investment and safeguard business operations.
The business leaders stressed that Bangladesh's ambition to become a US$1.0-trillion economy and create 10 million jobs by 2034 would require stronger private investment, business expansion and industrial diversification.
Achieving these goals, they said, would require a relationship built on mutual trust and cooperation between the government and the private sector, rather than one driven by fear and uncertainty.
The letter was signed by Mahbubur Rahman, President of ICC Bangladesh, Kamran T. Rahman, President of MCCI, Taskin Ahmed, President of DCCI, Mohammad Amirul Huq, President of CCCI, Mahmud Hassan Khan, President of BGMEA, Mohammad Hatem, President of BKMEA, Anwar-ul-Alam Chowdhury (Parvez), President of BCI, and Moinul Islam, President of BCMEA.
Calling for constructive engagement, the business leaders urge the NBR to resolve the issue through dialogue with representatives of the private sector.
"To remove the fear and panic created within the business community, we specifically request the immediate suspension or withdrawal of the notice and a resolution through mutual dialogue," the letter reads.
Copies of the appeal were also sent to the Finance Minister and the Commerce Minister seeking their intervention.
The NBR explains rationale behind the inspection notice.
Senior NBR officials told The Financial Express that the July 19 press release was issued following concerns raised by representatives of Bangladesh Textile Mills Association (BTMA) and Saudi Arabia-Bangladesh Chamber of Commerce and Industry during a meeting with Finance Minister Amir Khasru Mahmud Chowdhury.
According to the officials, business representatives alleged that corrupt tax officials frequently misappropriated tax payments, claiming that "out of every Tk 5.0 collected from taxpayers, only Tk 1.0 reaches the government treasury, while the remaining Tk 4.0 is pocketed by tax officials."
In response, the Finance Minister instructed the NBR to issue a public notice explaining the legal provisions governing on-site inspections and providing contact details so taxpayers could report incidents of harassment or corruption by tax officials, the officials said.
Responding to the business community's claim that many entrepreneurs are unfamiliar with Section 147, an NBR official said it is the responsibility of taxpayers to be aware of the country's laws.
The official, however, rejected allegations that the notice was intended to intimidate businesses.
"The objective is not to harass taxpayers," he said to dispel apprehensions.
"Rather, the notice provides a mechanism for businesses to lodge complaints if they have evidence of misconduct by tax officials during inspections."
What Section 147 allows: In its July 19 statement, the NBR urged taxpayers to be aware of the powers vested in tax officials under Section 147 of the Income Tax Act 2023.
Under the law, authorised tax officials may enter and inspect, without obstruction, the premises, offices or business establishments of any commercial or economic entity.
They are empowered to examine and requisition books of accounts, vouchers, bank statements, receipts and any document related to business activities.
The law also authorises officials to inspect information stored in computer systems, cloud servers, digital records or electronic devices and, where necessary, gain access by bypassing passwords or encryption.
To verify the accuracy of taxes deducted at source, officials may temporarily seize and retain books of accounts, documents, electronic records or digital devices.
They may also collect copies of documents, account records and digital data, and affix identification marks or official seals where necessary.
The NBR notes that Section 147(2) provides penalties for anyone who obstructs or refuses to cooperate with tax officials in carrying out their statutory duties.
The revenue board also urges taxpayers to deposit withholding taxes into the government treasury through e-Challan system using the correct legal provision and appropriate economic code.
To address concerns over the implementation of Section 147, the NBR has advised taxpayers facing ambiguity, alleged harassment or other grievances to contact the Member-Secretary of the NBR Committee on Section 147 via email at assistance147nbr@gmail.com.
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