Surge in zero-tax filers

The submission of zero income tax returns by both individuals and companies has risen significantly in the current fiscal year.
This has raised concern among tax officials who sense the concealment of actual income by the taxpayers.
The income tax wing of the National Board of Revenue, or NBR, has initiated a move to compile the data of return filers whose income is nil.
The wing is also planning to revisit the tax policy to make the payment of a token tax mandatory by all tax return filers.
In a letter sent on Tuesday, the wing asked field offices across the country to provide it with the data of nil returns for the FY 2018-2019 and FY 2019-2020 by January 23.
It also instructed the field offices to provide data of tax returns filed with the payment of income tax at reduced rates and the amount of income shown under the provision of reduced tax benefits.
Individual taxpayers with income below the taxable limit of Tk 250,000 do not need to submit tax returns.
However, the income tax law made the submission of tax returns mandatory for some categories of taxpayers, including having a motor car, club membership, government employees with Tk 16,000 monthly basic salary, etc.
There are no such exemption ceilings for corporate taxpayers. They can submit nil return or show loss and claim tax refund.
Talking to the FE, a senior tax official said the NBR has initiated the move for the first time to conduct a survey on how many tax return filers pay taxes.
"We are looking into the possibility of revisiting the tax policy to make a token tax payment by all who will file returns," he said.
Many of the field-offices inside and outside the capital city have found a large number of tax returns without taxes, he added.
Currently, taxpayers have to pay Tk 5000 as minimum tax if their income exceeds Tk 250,000 in a year.
The NBR has received 2.2 million tax returns in the FY 2019-20.
In contrast, the number of people holding Taxpayers' Identification Number, or TIN, is 4.7 million.
Although it is not mandatory for the TIN holders to submit tax returns, officials suspect a large number of them are not showing their actual income to evade taxes.
NBR officials said the field level income tax officials usually do not mention the nature of returns. For example, they do not report whether the taxpayers paid any tax with the returns.
Currently, the NBR has no data base of how many taxpayers file nil returns or in other slabs ranging from 10 per cent to 30 per cent.

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