Fixed deadline for tax return, penalty for time petition in offing [ Tritiyo Matra News ]

Fixed deadline for tax return, penalty for time petition in offing

Local May 19, 2016

The National Board of Revenue is set to introduce a cutoff date for filing income tax returns for individual taxpayers with the aim of ending its own unauthorised time extension practices.
The cutoff date will be known as the tax day, NBR officials said adding that the introduction of the day would also encourage people to submit their income tax returns by the day as there would be some obligations to do so.
Finance minister Abul Maal Abdul Muhith may announce the introduction of the tax day in his budget speech in June 2 for the next fiscal year of 2016-2017.
Under the plan of the revenue board, individual taxpayers will face financial disincentives like penalty or additional tax if they pay income tax and submit returns after expiry of the tax day.
Taxpayers, however, will be allowed to submit time petition for filing tax returns in delay but they will also have to pay some sort of punitive tax for the delay in payment of income tax.
According to the existing provision of the Income Tax Ordinance-1982, taxpayers currently can file income tax returns from July 1 to September 30.
But the NBR usually in every year extends the returns submission time by two to three months in phases as it gets low response from taxpayers in the July-September period though the revenue board has no authority to do so.
Trade bodies including the Federation of Bangladesh Chambers of Commerce and Industry and other stakeholders also demand time extension.
According to the income tax law, only deputy commissioner of taxes may extend the time for submission of tax returns, case to case basis, based on the taxpayers’ petition. He may also further extend the date up to two months with the approval of the inspecting joint commissioner of taxes.
Earlier, A DCT may extend the time up to six months but last year the NBR shrank it through amending the law.
Under the plan of the NBR, the revenue board will amend the existing provision of the law to introduce the cutoff date from the next fiscal year and scrap the scope for general extension of time for all individuals by the revenue board.
An individual taxpayer, however, will be able to submit petition to DCT seeking additional time for return filing, explaining the specific reasons for his/her failure in submitting returns in time.
The DCT will be empowered to provide the applicant with additional time on condition of paying penalty, a senior official of the revenue board told New Age on Wednesday.
Currently, there is no such penalty or disincentives for filing tax returns in delay with prior approval of the NBR.
The DCT, however, can impose a certain amount of penalty for failure in submitting returns in time.
A huge number of individual taxpayers every year either wait until the last moment to submit their tax returns or seek time for filing returns taking the advantage of the existing rules and practices causing revenue losses for the NBR, he said.
Many taxpayers find delaying in paying tax and returns submission beneficial as they can use the money to earn income while depriving the government from getting its receipt on time, he added.
According to the NBR data, more than 2.76 lakh taxpayer submitted time petition for submission of income tax returns in the last fiscal year though the revenue board extended the deadline up to November 30.
Officials said such huge number of time petitions cause additional hassle for taxmen to handle the returns though the task is supposed to end by September.
Introduction of the tax day will end the culture of delay in returns submission, they said.
The NBR took the move after the finance minister in September directed the revenue board to introduce the tax day to end the practice of extending deadlines for submitting tax returns every year.