NBR considering self-assessment only for corporate filers

Doulot Akter Mala | Published: May 11, 2024 23:01:59

The National Board of Revenue (NBR) is considering a move to a 'self-assessment' only system for corporate tax returns, where companies would declare their own assets and income from the next fiscal year.
Under this system, taxmen would not instantly scrutinise the declared information at the time of filing.
At present, both individual and corporate taxpayers have the option of filing under either the "general assessment" or "self-assessment" method.
Ninety-nine percent of individual taxpayers and roughly 50 per cent of corporate taxpayers -- mainly large corporations -- currently utilise self-assessment.
Tax officials say they are proposing the removal of the general assessment method in the 2024 finance bill to streamline the filing process and to make it hassle-free.
However, Chartered Accountant Jasim Uddin Rasel, a fellow member of the Institute of Chartered Accountants of Bangladesh (ICAB), said most large taxpayers choose the general method to avoid further scrutiny after return filing.
"In the general system," he said, "both taxpayers and companies reach a consensus on the amount of tax payable, as determined by an auditor in the financial statements at the time of submission."
The general system allows less room for the deputy commissioner to raise further questions about corporate tax payments, he added. Mr Rasel said self-assessed corporate tax returns still undergo audits, which can take 6-7 months to complete.
Preferring anonymity, a former tax official mentioned the complexities of post-assessment audits under the self-assessment method.
These audits, the official said, often require approvals from multiple tax officers at various stages, possibly leading to bribes or "speed money."
Large corporations, the former official said, prefer to settle all tax liabilities with the deputy commissioner of taxes to avoid dealing with numerous officials, including the commissioner, and involvement of intermediaries.
Tax experts, too, say the general assessment method is popular among corporate taxpayers due to the reduced hassle compared to the post-assessment stages of self-assessment.
Several corporate taxpayers who wished to remain anonymous said return filing and obtaining clearance certificates are involved with some "associated costs", which they said are bribes or "speed money" at various points within the tax office.
doulotakter11@gmail.com