DHAKA: The income tax wings of Bangladesh’s National Board of Revenue (NBR) decided to scrutinize the income tax and VAT returns of 65 large corporate taxpayers to detect possible tax evasion.
The large companies will be jointly audited by both income tax and Value Added Tax (VAT) wings of their respective Large Taxpayers Units (LTUs) for the first time, officials said.
Of the corporate bodies, 17 are commercial banks, six telecom operators, tobacco companies, eight insurance companies, leather goods manufacturers and others.
Both the LTU units have formed a joint taskforce to conduct the audit of income tax and VAT files and cross-check information.
“The taskforce in its recent meeting decided to re-examine the returns of the large companies that belong to both the units” said a senior tax official. Coordination of the two LTU units is needed to gear up pace of revenue collection, he added.
In the last tax year (2015-16), the LTUs achieved less than 1.0 per cent growth in revenue collection.
“During the last three years, the two units witnessed less than 5.0 per cent growth in revenue collection. We have targeted to achieve 22 per cent growth with intensified efforts,” he added.
Officials said the LTUs’ revenue collection growth depends on financial health of banks and other large companies. He said the scrutiny of a large corporate has already begun. The LTU income tax has some 300 corporate taxpayers while LTU VAT has 170. Both the units contribute significantly to aggregate income tax and VAT collection of the NBR.
Tax officials said joint initiative of the two wings can plug holes of revenue leakage. However, information of the taxpayers furnished in income tax and VAT returns is restricted and both the units are bound to maintain secrecy of taxpayers’ information.
Another tax official said a legal framework is needed to conduct joint audit and get access to each other’s tax files. Income tax and VAT officials can exchange their information but until the law is amended, there is a legal barrier to disclose sensitive information of the taxpayers, he added.
