The National Board of Revenue (NBR) has taken steps to verify information on the investments of taxpayers sanchayapatra (savings instruments) in order to prevent the misuse of tax relief facilities.
He says the measures will also widen the tax net.
As part of its measures, it integrated its system into that of the Ministry of National Savings.
The National Savings Directorate has already provided the commissioners of each tax zone with usernames and passwords.
Policy Research Institute Executive Director Ahsan H Mansur welcomed the move.
But it is not sure that this will increase tax realization as sanchayapatra investors pay withholding tax on their income from savings instruments.
“But if they are outside the tax net, the BNR can use their information to bring them back under the tax net. This will widen the tax net and also create opportunities to earn more income from their other sources of income.” , he told The Business. Standard.
Sanchayapatra investors pay 5-10% withholding tax on interest.
According to the Income Tax Ordinance, a taxpayer will get sanchayapatra investment tax reductions. He will get a 15% discount for investing 25% of his annual income in sanchayapatra.
But there will be no rebate on investments exceeding this figure. For example, a person who earns Tk4 lakh per year can get discounts for investing Tk1 lakh. The discount will amount to Tk 15,000.
The NBR recently wrote to tax zone officials, asking them to verify taxpayers’ sanchayapatra investment information.
Signed by the second secretary of its tax information management and assessment department, Lincoln Roy, the letter said verifying sanchayapatra’s investment information would facilitate legal action against investors.
But it must be ensured that taxpayers and marginal investors are not harassed while the process must be led by officials from the ranks of joint commissioners and additional commissioners, according to the letter.
He asked officials to send different types of taxpayer information, including their names and tax identification numbers, the amount of sanchayapatra investment, and whether they had submitted tax returns, every 15 days. .
During the pre-budget discussion on March 10, NBR Chairman Abu Hena Md Rahmatul Muneem said the government is working to widen the tax net and determine the right amount of taxes using all legal tools. .
NBR sources said that a large portion of taxpayers submitting tax returns claim tax refunds on sanchayapatra investments every year.
But their investment information could not be verified in the past because the BNR database was not connected to that of the National Savings Directorate, which led to misuse of the facilities. tax relief.
Requesting anonymity, a senior NBR official said there had been cases of taxpayers providing false information about investments.
He said the integration of the NBR system with that of the National Savings Department was necessary to deal with such frauds.
“There are other fraudulent activities as well. For example, many taxpayers buy sanchayapatra just before submitting their returns just for discounts. They sell sanchayapatra after submitting their declarations, which is a serious irregularity. It’s like cheating on the government, ”he explained.
A five-year sanchayapatra earns 11.28% profit at maturity. Up to Tk30 lakh can be invested in a single name and Tk60 lakh in common names. There is no cap for institutional investors.