Doulot Akter Mala The National Board of Revenue (NBR) has started refunding excess income tax to the individual taxpayers from this year. This is being done to help the people who are paying advance tax despite having below taxable income. The Board has prepared 'refund vouchers' for the first time and distributed those to all of the tax offices across the country for refund of excess tax. Under the existing tax rules, people have to pay advance tax on withdrawal of their profits of bank deposits and at the time of the fitness renewal or new registration of private cars. Taxpayers who have taxable income usually adjust their excess paid tax with the tax returns of the forthcoming year. But, people having below taxable income cannot do so. From now on, they can claim refund of their paid advance tax. Senior citizens, housewives or salaried persons having below taxable income are the main group which can claim refund of their paid tax in the tax offices after submission of zero tax returns. Existing income tax rules allow people with annual income below Tk 220,000 to enjoy tax exemption. For women and senior citizens, the limit for tax-free income is Tk 2,25,000. Tax officials said so far around 300 salaried persons, mainly army personnel, obtained tax refund from tax offices recently. Taxmen are giving tax refund on the AIT paid in fiscal year 2012-13. The NBR has expanded collection of withholding or advance tax measures in a bid to ensure tax compliance. With the expansion, a number of people having below taxable income have to pay income tax. Absence of tax refund system has frustrated many of the people who are forced to pay 10 to 15 per cent tax on bank deposits despite having below taxable income. NBR member Dr Syed Aminul Karim said taxmen are bound to refund the paid advance tax to the taxpayers if they claim it following existing procedure. Officials said there are nearly 50 million bank depositors who are paying 10 to 15 per cent tax at the time of withdrawal of profits while only 1.7 million have valid TIN numbers. "There are many taxpayers who can get refund if they obtain TIN and submit zero returns to the tax offices," said a senior tax official. Tax officials said there is no data on how many taxpayers submit zero tax returns but they estimated that the number might be nearly 50,000 out of 1.7 million TIN (Taxpayers Identification Number) holders. Although the NBR expanded advance tax, most of the measures have been set as 'final liability' for which taxpayers cannot claim tax refund, the officials said. Collection of income tax achieved the highest growth compared to that of the other two wings of the NBR, Value Added tax (VAT) and Customs. This has been attributed to imposition of advance tax in some major areas including bank depositors and private car owners. In fiscal year 2012-13, the tax collection from interest income of bank depositors increased by 46 per cent compared to the corresponding year due to levying of 5.0 per cent additional tax on non-TIN submitting depositors. Many of the tax officials in the field offices said a huge number of bank depositors have paid 5.0 per cent additional tax for not having TIN. They can claim refund of the paid tax through obtaining TIN and submitting nil returns. Md Shahadat Hossain FCA, Chartered Accountant Council member and former Vice-President the Institute of Chartered Accountants of Bangladesh (ICAB) said there is still fear factor among the general people on coming under the net of income tax. Existing ceiling for tax-free income at Tk 2,20,000 is quite illogical and not in line with the present economic context, he said. "Anybody having annual income below the limit cannot save anything after bearing all expenditures. Majority of the bank depositors have income above the limit," he added. "Maybe they prefer paying higher rate of tax instead of obtaining TIN fearing further scrutiny by the taxmen," he said. Sources concerned said the tax authorities should make people aware of refund system to help below taxable income people to claim their paid tax. They said willingness of taxmen for giving tax refund is necessary for successful implementation of tax refund system.
NBR refunding excess income tax
FE Team | Published: October 13, 2013 00:00:00 | Updated: February 01, 2018 00:00:00
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