Companies are allowed to file their tax returns for fiscal year 2021-22 by October 15 with approval from the relevant tax authority, tax officials have said.
Many of the corporate taxpayers had submitted "false financial statements" previously with the tax returns to show less profit and pay less tax as there was no such mandatory verification system.
Tax offices used to receive around 30,000 corporate tax returns every year with only 10,000-12,000 audited by chartered accountants.
Taxmen say they have observed slow pace of corporate tax-return submission as many of the companies faced difficulties providing requisite documents and supporting papers to the chartered accountants for preparing DVS-verified financial statements.
Corporate tax-return submissions until September reached 29,463 despite extension of deadline.
Currently, a total of 93,000 companies have Taxpayer Identification Number (TIN), NBR data show.
Tax consultants say a large number of companies will have to prepare financial statements consistent with the previous tax returns.
The National Board of Revenue (NBR) has made Document Verification System (DVS)-verified audited financials mandatory for all corporate taxpayers since December 2020.
The Institute of Chartered Accountants of Bangladesh (ICAB) developed the DVS in a bid to ensure transparent accounting system in Bangladesh.
The revenue board has signed a memorandum of understanding with the ICAB to make DVS-verified financial statements mandatory with the corporate-tax returns to prevent window-dressing.
Under this accord bringing in the failsafe tax accounting, the corporate taxpayers cannot prepare multiple financial statements tampering with loss or profit volume for paying less tax or applying for loan in the financial institutions.
The time for submission of corporate-tax returns was scheduled to expire on January 15, 2022. However, corporate taxpayers could obtain time extension up to four months, until May 15, 2022, with approval from relevant tax authority.
"Considering the delay for DVS compliance, the NBR would allow four more months for corporate taxpayers to submit tax returns without penalty," a senior tax official says.
Former income tax member of the NBR Aminur Rahman said the corporate taxpayers have to comply with the DVs requirements of auditors to get approval for their financials.
"As there was no such verification system earlier, many of the companies used to prepare two-three audit reports for different purposes," he adds.
Mr Rahman hopes the device (DVS) would help in hooking an additional 5,000 corporates on the tax net to file returns this year.
ICAB data show a total of 36,981 Document Verification Codes issued so far to the 29,464 companies between July 1, 2021 and September 7, 2022.
ICAB president Md Shahadat Hossain said the institute has been implementing DVS with the support of other relevant regulators and stakeholders, especially with sincere cooperation of the NBR.
"…still we are at beginning stage of implementing such a robust system," he added.
Undoubtedly, DVS has increased the scope of monitoring the quality of audited financial statements, he observed.
"We strongly believe that improved quality of audited financial statements will be helpful in enhancing the revenue and strengthening the financial ecosystem of the country, in the near future."
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