A brigade of tax agents is about to be fielded across Bangladesh for revenue boost, after recurrent target failures, but lawyers who help taxpayers through cumbersome submission procedures cross swords with the authority.
Sources said taxmen and tax practitioners are in a legal tussle over the fiscal provision introduced for appointment of new professionals for preparing tax returns for the taxpayers from the current fiscal year (FY).
Government's revenue authority framed the rules of appoint of Tax Return Preparers (TRP) to assist fresh taxpayers in preparing their tax returns and submitting online. But tax lawyers see it parallel to the job they are doing for fees.
Following the row, the High Court has issued a stay order halting for next six months appointment process of the TRP after tax lawyers' associations lodged a writ petition to challenge the provision.
In Response, the National Board of Revenue (NBR) has also made an appeal to the High Court (HC) for a review of the stay order. Hearing on the NBR appeal was scheduled for Monday, tax lawyers said.
Bangladesh Tax Lawyers Association and Dhaka Taxes Bar Association had jointly lodged the write petition on January 10, 2024 in the HC division of the Supreme Court, just as the NBR started preparation to hold test on TRP recruitment.
Talking to the FE, NBR member (Tax Policy) AKM Badiul Alam said there is no scope for overlapping the job of TRP and tax lawyers as TRPs would only deal with fresh taxpayers without having authority of representation before the taxmen on behalf of taxpayers.
"We have a goal to increase the number of taxpayers within a short time by devising new strategies in a bid to strengthen country's tax-base. TRP is one of those steps," he added.
Tax lawyers and Income Tax Practitioners are empowered to assist all taxpayers, including corporate ones, which has been restricted for TRPs, he said in a further clarification to dispel doubts.
"There would be no conflict of interest between the two professions," he added.
Former president of Dhaka Taxes Bar Association Md Abdul Matin says there are more than 50,000 tax practitioners in Bangladesh who are regulated by BTLA's 68 Bars. Those professionals would be affected if the new rule implemented as both have similar job description.
He says, "The taxmen should discuss with the tax lawyers before preparing such rules as they support the tax- collection process of the public exchequer."
In 2010, the United States of America introduced the TRP in its Internal Revenue Services (IRS) which was scrapped on January 18, 2013.
Tax lawyers argue the system would create thousands of middlemen and widen the scope of tax evasion.
Currently, tax lawyers are assisting taxpayers in preparing and submitting tax returns, dealing with cases on behalf of taxpayers, submitting necessary documents, and in appeal tribunal-related activities.
They say the NBR has its own Tax Inspection and Survey wing to increase the number of new taxpayers, without appointing TRP.
Taxmen say the TRPs or tax agents are not entitled to attend hearings before the taxmen. They can only prepare and submit tax returns on behalf of the taxpayers by using the online portal (etaxnbr.gov.bd) of the National Board of Revenue.
The time for submission of tax returns by individual taxpayers is scheduled to expire on January 31, 2024.
The NBR has introduced the new concept of TRP in the budget for the current fiscal year in a bid to expand tax net and hook new taxpayers onto the tax net with the help of those agents.
Online tax-return submission would get popular through the involvement of the TRPs, the tax officials said.
The taxpayers would not have to pay any charge to the TRPs as they will get the commissions from the NBR based on the paid taxes.
The NBR would issue a Unique Identification Number (UIN) to the selected TRPs.
However, tax lawyers could obtain TRP certificates by showing their relevant professional documents only, without appearing for any examination. The NBR would offer the commissions to the TRP for the first five consecutive years. Thereafter, they would not get any incentives for tax-return preparation.
For the first three consecutive years, the tax-brokers would get 10-percent commission on the minimum tax amount paid by a taxpayer. For the next Tk 15,000, they would get 2.0 per cent more, while an additional 1.0 per cent for next Tk 50,000 and 0.5 per cent for the rest.
The amount of commission would be cut down in the fourth and fifth year. The TRPs would get 5.0-percent commission on minimum taxes, while 1.0 per cent, 0.5 per cent and 0.25 per cent for the next Tk 15,000, Tk 50,000 and rest of the amount respectively.
Also, the supporting firms or companies would get 10 per cent of the commissions from the receivable amount of the TRPs.
However, the TRPs would not be entitled to any commission in case of expiry of the return-submission deadline.
The NBR can cancel the TRP certificates in case of irregularities. The TRPs or its supporting firms might face penal action-even criminal case-in case of disclosure of taxpayers' private information in the tax returns.
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