Taxmen now have the authority to disclose information about undeclared assets and income of tax-evaders in the current financial year, as the restrictions on taxpayer-information privacy have been eased under the new tax law.
This new provision, integrated into the Income Tax Law-2023, grants tax officials the unprecedented authority to release data regarding undeclared income and assets of taxpayers once these have been identified through investigation or inspection.
However, tax officials will not be permitted to disclose details about tax-evaders unless they have been uncovered through their own inquiry.
Officials said this provision will enhance the tax-collection efforts targeting evaders, as public shaming will serve as a deterrent to them.
Yet, economists argue that this provision is unfair to taxpayers and could undermine their trust in tax officials.
"In many cases of tax evasion, it appears to be an unintentional mistake on the part of taxpayers who often struggle to interpret legal provisions accurately," said Dr M Mashrur Reaz, chairman and founder of the Policy Exchange of Bangladesh.
Dr Reaz expressed concerns that this provision could be weaponised by certain interests to tarnish a taxpayer's social standing. "In some instances, tax officials may also make mistakes when identifying tax evasion. In such cases, taxpayers could face victimisation if they are publicly labelled as evaders."
He thinks the enforcement of this legal provision could instil fear and panic among taxpayers.
However, a senior tax official observed that details of tax evaders and loan defaulters should be made public to alert others about the consequences of such offences.
Naming and shaming, he argued, would uphold the integrity of tax officials, given allegations of underhanded dealings with taxpayers to facilitate tax evasion, resulting in a loss to the public exchequer.
He said transparency in tax collection and efficient revenue mobilisation by the state would contribute to the development of a tax-paying culture in the country and improve the tax-to-GDP ratio.
According to the Income Tax Ordinance-1984 which has been replaced by the new income tax law, Deputy Commissioners of Taxes (DCTs) were held accountable for any unauthorised disclosure of information regarding tax defaulters.
The official said the new law stipulates stringent penalties to safeguard the private information of taxpayers provided to the tax authority.
"The new law has ensured the highest level of protection for taxpayers' privacy. It would be a criminal offence if any tax official discloses private information of a taxpayer that has been furnished in returns," he added.
A tax official failing to safeguard taxpayers' privacy could face up to three years of imprisonment, he said.
The Right to Information Act, specifically Sections 7(h),(i),(j) and (r), stipulates that any information which may offend the privacy of one's life, any information which may endanger life or physical safety of any person, any information given secretly to assist the law enforcing agencies, or any personal information protected by any law, are not subject to mandatory disclosure by government and certain private organisations.
This means that private or personal data cannot be accessed by just anyone.
Apart from undisclosed assets, the new tax law allows tax authorities to disclose taxpayer information to law enforcement personnel for investigation purposes under the Penal Code, the Anti-corruption Commission (ACC) Act, the Comptroller and Auditor General of Bangladesh (CAG) for the fulfillment of constitutional duties, as well as to customs and VAT authorities to combat money laundering and terrorist financing under the Foreign Exchange Regulation Act.
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