Submission of income-tax returns is likely to be made mandatory for all private-sector executives and officers in management position from July 01 under a new law.
The Finance Bill 2017 holds this provision as the government bids for bringing onto the tax net all having taxable incomes to enhance payroll tax commensurate with a substantially higher revenue-collection target for the next fiscal year.
An employee holding an executive or a managerial position in a business or profession will have to submit income-tax returns from the fiscal year 2017-18, irrespective of their pay packet, said a senior income-tax official.
Currently, tax-return submission is mandatory for government officials having monthly income of Tk 16,000 and above. Obtaining Taxpayer Identification Number (TIN) is mandatory for both private-and public-sector employees having monthly income above the threshold at Tk 16,000.
The official said there is no exemption ceiling for private-sector executives and management officers as their salaries are considerably higher than the ceiling.
"I believe private-sector executives and employees in the management position have monthly income above Tk 16,000. They cannot have income below taxable limit at Tk 250,000 for individual taxpayers," he said
Currently, government staff members, even drivers, have to submit tax returns and the tax authority wanted to make a balance by incorporating the mandatory provision into the income-tax ordinance, he added.
Although the number of TIN-holders showed an impressive growth in the current FY, tax-return submission remained poor.
The number of TIN-holders is around 2.9 million while return submissions are around 1.6 million in FY 2016-17.
However, the finance minister in his budget speech Thursday expressed his satisfaction over the surpassing of the targets--tax returns 1.5 million and TIN-holders 2.5 million--he set in the last budget.
SM Humayun Kabir FCA, income tax sub-committee convener of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), said there must be an exemption slab for private executives and managers as all companies do not pay high salary.
"There are many companies running under loss and cannot pay salary regularly to their employees. And also, due to job crisis in recent times employees do not have bargaining power on fixation of their salaries," he added.
An exemption ceiling must be there to help taxpayers avoid unusual harassment, he suggests.
It is "discrimination" as there is an exemption ceiling up to Tk 16,000 for government employees but nothing for private executives, he said. It is not business-friendly and realistic measure for the public.
Officials said many of the private-sector executives avoid submission of tax returns despite having considerable amounts of income. Many of them also paid tax at source of different services but not under the tax net.
Taxmen cannot scrutinize their income and wealth statements due to non-submission of tax returns. Income-tax officials said the new provision on withholding tax would help in increasing the number of tax returns.
doulot_akter@yahoo.com
