Corporate taxpayers\\\' number set to go up by 25pc this year

Number of corporate taxpayers is set to increase by 25 per cent this year compared to the corresponding period last year thanks to the newly introduced online TIN issuance system from the current fiscal year (FY).
A total of 20,634 corporate taxpayers obtained Taxpayers Identification Number (TIN) online until Sunday. Of the e-TIN holders, some 4,794 companies have obtained new TINs.
"Around 16,000 companies were regular in submission of their return until FY 2012-13. With the introduction of the e-TIN system, the new corporate taxpayers are expected to submit return from the next FY," said a senior tax official.
The growth of corporate taxpayers remained unmeasured prior to the introduction of online TIN system as companies were scattered under different tax zones across the country.
The NBR introduced the system on July 1, 2013, and it is scheduled to expire on March 31, 2014. The official said the NBR was actively considering extension of the time for e-TIN registration by three more months, until June 30, 2014.
"The new corporate taxpayers are expected to submit return next year that might offset probable loss from corporate tax cut in the budget for FY 2014-15," he said.
"The number of companies' return submission will increase as taxmen have the effective tool, e-TIN, to monitor and make them tax compliant," the tax official added.
Many of the companies were running their business with fake TIN, which is being formalised under the e-TIN system, he observed.
Corporate tax collection will go up significantly as taxmen expect the number of corporate TIN holders to increase sharply under the new system, the official added.
Currently, corporate tax collection by the Large Taxpayers Unit (LTU) is one of the largest sources of income tax collection. There are some 300 companies under the LTU, including banks, financial institutions, insurance companies etc.
Tax officials said there are many large companies under other tax offices across the country which are paying significant amount of taxes.
Aminur Rahman, former income tax member, said the taxmen in a study have found some 62,000 companies as having TIN out of 1,02000 registered companies with the Registrar of Joint Stock Companies (RJSC).
Some 40 per cent of the companies are out of the tax net as they conceal their actual business information, he added.
He said the tax burden is being placed on the existing taxpayers instead of putting focus on expansion of the tax net.
Humayun Kabir, convener of the sub-committee (income tax) of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), said the high rate of corporate tax was discouraging taxpayers from paying tax and investors from coming up with fresh investment.
"Corporate tax rates are 27.5 per cent to 45 per cent for the companies, while it is 10 to 25 per cent for individuals. Such a wide gap works as a disincentive for investors," he added.  
Humayun Kabir said effective tax rates on corporate units are much higher, as businesses have to pay tax at different stages of their operation.
Tax officials said the high rate of corporate tax would come down gradually with the expansion of the tax net. Automated tax administration would pave the way for the initiative.
Until Sunday, some 11, 22, 662 taxpayers obtained TIN, including companies and individuals, under the e-TIN system. Of the taxpayers, some 2, 46, 426 are new, while the rest have re-registered themselves by obtaining fresh TIN.