Only income taxpayers qualify for candidacy in parliamentary polls

Unlike the 11th national elections, only income taxpayers will be able to contest the upcoming parliamentary election, as the amended electoral law has incorporated a new provision making the submission of tax returns mandatory for all candidates.
In the next national polls, copies of tax returns will be made public along with the existing eight-point disclosure papers of a candidate on the Bangladesh Election Commission (EC) website.
According to the amendments to the Representation of the People Order (Amendment) on July 4, 2023, candidates willing to participate in the 12th parliamentary polls would have to submit a certified copy of tax returns and proof of return submission with their nomination papers to be eligible for contesting the polls.
The Parliament has included the sub-clause "(i) a certified copy of the return submitted under section 166 of the income tax law, 2023 (Number 12 law of 2023) and proof of the submission of the return as required by section 264 of the said Act."
The RPO is a set of laws governing how a candidate can participate in an election, setting eligibility criteria, disclosure lists of income and expenditures, the role of the EC and the registration of Bangladeshi political parties.
Tax officials said the inclusion of the new provision is a "unique decision" to ensure tax compliance of upcoming lawmakers, which is "rare" even in many developed countries.
Previously, the submission of tax returns was mandatory for election candidates who are taxpayers and have a Taxpayer Identification Number (TIN). However, it was not mandatory for candidates who do not have taxable income or who are not filing tax returns.
Both taxpayers and non-taxpayers were eligible to contest national polls earlier, before the recent RPO amendments.
Election observers said the new provision would help ensure the financial transparency of election candidates since tax returns usually contain all details of an individual's income and expenditures, provided they are submitted properly.
However, there is no prohibition for tax defaulters (tax revenue) in the RPO to become ineligible for national elections.
Participation issue prevented previous EC attempt
In the 2018 parliamentary election, candidates without taxable income were eligible to participate.
Before the 11th Parliamentary election, the then EC Secretary Helal Uddin Ahmed said although they proposed to make the submission of tax returns mandatory for all candidates, the Cabinet had rejected the idea in order to allow individuals from all income groups to participate in the election.
In the 2018 polls, it was found that many candidates did not include tax returns with their declaration papers submitted to the EC, as it was not mandatory under the RPO.
In the 11th parliamentary election, five out of fifteen candidates in the Dhaka-4 seat refrained from submitting their income tax returns to the EC, according to the EC secretariat website.
In the Dhaka-5 seat, five candidates did not submit tax returns, followed by two in Dhaka-6, four in Dhaka-7, seven in Dhaka-8 and four in Dhaka-9, according to a random sample survey by the FE.
Although the majority of candidates submitted their tax returns to the EC, many did not specify the amount of tax paid.
A study conducted by the civil society platform Shushashoner Jonno Nagorik (SHUJAN) on the ninth parliamentary election revealed that 57 per cent of candidates in the 2018 national polls did not disclose the amount of tax they had paid.
Still a scrutiny gap
Although officials say the change in the electoral law is to help ensure financial transparency in the polls, still there are other concerns.
While talking to the FE, officials from both the tax and EC secretariats noted that financial transparency of candidates in national elections has remained one of the less scrutinised areas in Bangladesh, even though polls are considered to be expensive events.
Speculations persist about the use of a substantial amount of undisclosed money in elections, while the tax amnesty meant to formalise it has largely been ignored by influential figures, they said.
According to officials, statements of income and expenditures submitted to the EC have never undergone investigation by the relevant authorities. Neither the EC nor the tax authority has taken any action to prevent tax defaulters from participating in the election.
EC secretariat sources mentioned that they invite tax officials to the nomination paper selection committee to verify tax certificates, but no effort has been made so far to address the issue of tax defaulters.
According to the electoral law, loan defaulters are prohibited from participating in any election.
A senior EC secretariat official recently said that they sent a letter to the Ministry of Finance asking for a list of loan defaulters from banks, but they never requested tax authorities to provide information on tax defaulters.
He acknowledged that the area of tax scrutiny remains unexplored, which could potentially help the government trace tax defaulters and compel them to pay their due taxes.
On July 18, the EC secretariat dispatched a letter, signed by Deputy Secretary Md Atiar Rahman, to the secretary of the Financial Institution Division of the Ministry of Finance, requesting a list of loan defaulters over the Netrokona-4 by-polls, scheduled for September 2.
In a previous parliamentary election, Shushashoner Jonno Nagorik (SHUJAN) revealed that about 26 per cent of candidates possessed assets between Tk 0.5 million and Tk 2.5 million, while 53 per cent, or 1012 out of a total of 1892 participants in the polls, were businessmen.
Dr Badiul Alam Majumder, secretary of SHUJAN, said that the government's machinery has overlooked transparency issues among election candidates.
"Most of the tax returns submitted to the EC are fake and fabricated. Providing false or incorrect information is a punishable offence according to EC law and a criminal offence under state law," he added.
Government institutions have been entirely impacted and are protecting the influential, he commented.
Poll spending off the radar too
Besides, the election spending vouchers by candidates have never been reviewed to identify discrepancies between declared and actual expenses.
Election experts often question the financial transparency of candidates who are required to limit their expenses per voter to Tk 10 or a maximum of Tk 2.5 million.
They view the ceiling for election expenditures as unjustified, making it challenging for candidates to maintain transparency in their spending.
The EC has not taken effective measures to control unauthorised expenditures beyond the set limit, and it has become an "open secret" that candidates spend manifolds higher than the ceiling.
A Transparency International Bangladesh (TIB) report found that candidates in the 11th parliamentary election spent three times more than the actual limit set by the EC.
Although the RPO of Bangladesh is considered one of the best in South Asia, its execution remained poor here, said Iftekharuzzaman, executive director of Transparency International Bangladesh (TIB).
Although the EC's expenditure for holding elections has increased, the ceiling for election candidates has remained unchanged since 2014, forcing candidates to hide their actual expenditures. Most candidates cover their own expenses during the election.
"I find it necessary to increase the maximum ceiling for election expenditures, considering the inflationary impact on the economy," said Dr Iftekharuzzaman.
He said the tax returns submitted by candidates are often doctored, with information concealed.
"It's possible to estimate actual election campaign expenditures using a method, but detecting underhanded dealings in nomination paper business is difficult," he added.
A senior tax official explained that candidates who spend on election campaigns submit tax returns in the following corresponding tax year, detailing their income and expenses. Cancelling candidacies based on incorrect or fake information in tax files is not possible.
Key transparency factors remain largely unaddressed?
A commissioner at a field-level tax office mentioned that many election candidates rush to the tax offices before polls to resolve disputes with tax officials and settle long-pending cases, clearing outstanding dues.
Jesmin Tuli, former Additional Secretary of the EC secretariat, commented that there is no evidence of punitive measures being taken against any election candidates for violating EC regulations regarding the maximum expenditure limit.
Candidates in national elections are compelled to conceal actual expenditures in order to adhere to the expenditure limit, she added.
Ms Tuli noted that the EC has done little to ensure transparency in election expenditures by candidates, particularly in some key aspects.
There is no monitoring team or cell within the EC tasked with scrutinising the submitted documents of a candidate's election expenditures.
Candidates in national polls are required to submit vouchers for all expenditures to the EC within 30 days of the election to the returning officer. However, the vouchers are not reviewed to seek clarification on any discrepancies, she added.
Can taxmen get the job done?
Tax officials said that candidates in national polls rarely keep evidence, employing various innovative tactics such as having posters and banners sponsored by someone else.
They also said that tax authorities have never been officially instructed to examine the tax files of candidates to uncover any concealment.
Due to the sensitivity of the issue, revenue board high-ups also refrain from addressing this matter, they added.
Dr Syed Aminul Karim, a former Income Tax member of NBR, pointed out that many candidates avoid using banking channels for transactions to hide actual expenditures. However, tax officials can trace this through specific expenditure analysis methods.
Some candidates obtain clearances from the tax department before submitting nomination papers, he added.
He also emphasised the need to scrutinise tax compliance before electing lawmakers.

[email protected]