Speakers during an ICAB webinar have said the Income Tax Act 2023 was aimed for a reduction in income inequality and ensuring simplicity of terms.
They, however, urged the revenue board to make the progressive rate of taxation in a way so it applies to all classes of taxpayers, not to individuals and non-companies only.
They also called for the government to make tax code simpler, especially for those with multiple income sources or businesses.
The speakers made the suggestions during the webinar 'Income Tax Act 2023: Its Salient Features and Practical implications' hosted by The Institute of Chartered Accountants of Bangladesh (ICAB) on Wednesday.
Speaking as the chief guest, National Board of Revenue (NBR) member (taxes appeal and exemption) Iqbal Hossain said "the wrong choice of words" in the law will be reviewed and amended gradually.
According to him, the new tax law has tried to match with international accounting standards.
Mr Hossain said there was no provision of extending deadline for submission of returns, adding: "Taxpayers, especially individual taxpayers, must submit tax by November 2023."
ICAB president Md Moniruzzaman said the Income Tax Act was a fundamental piece of legislation affecting every citizen and business here.
Citing the law as milestone in the tax system, he said it has followed the fundamental principles of progressivity, a reduction in income inequality and ensuring simplicity.
"But the progressive rate of taxation doesn't apply to all classes of taxpayers, as it only applies to individuals and non-companies to some extent."
It embraces digitalisation by streamlining return filing online, avoiding hassles that also involve a waste of time of going to tax offices physically.
Mr Moniruzzaman said the system removed fear of many contacting tax officials and taking assistance of intermediaries for no substantive reason.
In an effort to make tax compliance more accessible, he said the 2023 Act simplifies the tax forms.
"It's designed to make it easier for individual taxpayers to understand and complete their returns, thereby reducing the burden of tax compliance."
To boost economic growth, Mr Moniruzzaman said the Act included provisions for tax incentives for investments in various sectors, such as infrastructure, renewable energy and technology.
"These incentives are aimed at attracting both domestic and foreign capital and promoting job creation."
To tackle tax evasion and fraud, he said the Act incorporated advanced technology like data analytics and artificial intelligence to identify and track potential tax evaders.
"The NBR needs to impart training to its officers to adapt to the sophisticated systems followed in the developed world."
However, he said an increase in penalties for tax fraud and evasion was a riskier proposition.
The ICAB chief said the Act's anti-tax evasion measures might not be entirely foolproof, and tax evaders may find ways to circumvent the system.
He expressed fear that some argue that the Act's progressive tax rates and environmental taxation may discourage investment and economic growth.
He said the new law represented a comprehensive effort to modernize tax system, promote fairness and support economic growth.
By implementing progressive tax rates, encouraging digitalization, and fostering environmental sustainability, this Act seeks to create a fairer and more prosperous society.
Former NBR member Aminur Rahman said the new law did not address the issue of tax at source, adding that some parts of it, especially final calculation, were simplified in the law.
Small taxpayers are not protected in the new law. There was some protection for them in the previous law, according to him.
Another former NBR member, Apurba Kanti Das, said the new law was easily comprehensible and detailed.
Bapan Chandra Das, NBR second secretary (Tax, Education and Advertisement), said the tax law has been made in Bangla meant for all people's understanding.
Snehasish Barua, partner of Snehasish Mahmud and Co and Chartered Accountants, presented the key features of the new tax law.
He said payments above Tk 500,000 through non-banking channel would be inadmissible, with the exception of purchase of raw materials.
The Act will enhance tax compliance, increase tax collection, and promote a fair and transparent tax system.
He said the net income of individuals would substantially reduce for paying tax on provident fund.
ICAB past president Md Humayun Kabir moderated the event.
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