Online tax returns may begin in 2016

The National Board of Revenue (NBR) is expected to introduce income tax returns submission, processing, and payment online by the first of January 2016 to facilitate taxpayers, offering them smooth services.

Under the ‘Strengthening Governance Management Project’, the board is set to introduce online filing and digitisation of tax returns and establishment of taxpayers information and services for the income tax administration with an aim to enhance transparency and accountability in tax filing by implementing good governance through ICT to increase tax revenues.

“The taxpayers will have different services online by January 1, 2016. However, it could be introduced even by September next year if the board do not face any problems during piloting the project,” NBR chairman Md Ghulam Hussain told the reporters yesterday.

The board will start piloting the project within next eight or nine months at a suitable places as like as Dhaka, Chittagong and other divisional headquarters, he added.

“As it will take 18 months to accomplish the whole task, we are expecting that we would be able to conclude the work by December next year whereas the piloting would be done in the next eight or nine months. There will be piloting for two or three months where correction and adjustments will be made, if needed,” he said.

The taxpayers will be able to submit their income tax returns online and all other processes including assessment of returns, tax calculation, payment, audit, providing tax clearance certificates will be done online under the system.

The NBR chairman came up with the disclosure at a briefing after inaugurating integrated income tax administration system at the NBR headquarters. Vietnamese firm FPT Information System Corporation was awarded the contract for implementing the project. Annual Development Bank is assisting and financing the project.

The project will be implemented at a cost of Tk78.98 crore, of which the government will provide Tk12.68 crore and the ADB will fund the remaining Tk66.3 crore. The NBR evaluation committee selected Vietnamese firm FRT Information System Corporation for Tk51.31 crore.

A major portion of the project’s allocation Tk24.90 crore will be spent for buying three pieces of software. Another Tk19.05 crore has been allocated for buying the hardware for the whole system and Tk8.28 crore for procuring hardware for regional data entry and information centre.

The Vietnamese firm has got the contract as a package work for software customisation where it will use off the shelf software and that will be customised as per NBR need. The Vietnamese team will work with consultation of a NBR team, consisting by a group of NBR officials led by an NBR member.

The new system will have interface with commerce ministry’s trade portal, Export Promotion Bureau, office of Chief Controller of Import & Exports, Bangladesh Bank and other institutions.

There will be some manual system at the early stage for a shortest period but the full system will be automated as soon as possible, the chairman said.

The system will have interfaces with National ID project, customs, value added tax, Bangladesh Bank, other banks, insurances, treasury system, and standard interface with third party applications.

Once the online system is up, taxpayers will be able to access all services related to income tax by registering themselves on the project’s website.

Through the project taxpayers under a total of 649 circle offices, including 11 survey circles, will be connected online and the circle offices will share information with each other to ease the process.

Presently, the online tax return submission system is in place covering tax zone 8 of Dhaka and about 23,000 taxpayers under the zone are submitting their tax returns online.

In 2009, the NBR first launched the e-filing for large taxpayers unit. Later the facility was extended to tax zone-8 in Dhaka.

NBR plans to collect withholding tax:

NBR chairman Hussain said that the board needs to collect more withholding tax to manage money for the country’s development.

“In the United States, they collect around 96% withholding tax whereas it is only 52% in Bangladesh. We have plans to manage more withholding tax in future,” he said.

The electronic tax deduction at source (eTDS) will be made to increase the tax net. “Under the eTDS project, the tax net will be increased. There are some loopholes from government side in collecting the tax as the government do not collect the tax, rather the service or product provider pays the tax, and they do not pay the tax on due time,” he said.

To avoid situation, the board will introduce eTDS system where electronic data and trade data will be saved automatically and the revenue collection will be made instantly.

Potential taxpayers

“I think there should be 60 lakh taxpayers in Bangladesh. However we have information of only 18 lakh taxpayers, whereas the rest 42 lakh is still absent,” Hussain said.

He, however, hoped that the board would be able to bring 20 lakh to 25 lakh more people under the tax net in next five years to double the tax collection.

“If we can bring 20 to 25 lakh people more in five years as per our plan, the tax should be doubled. Now, the income tax target is Tk57500 crore for the current fiscal, which should also be doubled by two years as the economy have that potential,” the chairman opined.

According to the Economic and Social Survey of Asia and the Pacific 2014, prepared by the Economic and Social Commission for Asia and Pacific (Escap) of the United Nations, less than 1% population pay tax in Bangladesh.