New law offers scope to strike off TIN-holders

For the first time, the National Board of Revenue (NBR) has sought to grant opportunity to individuals and companies to de-register or make their taxpayer identification number (TINs) dormant owing to no taxable income and dissolution.

The NBR has kept the provision in the proposed Income Tax Bill 2023 and the rule will come into force after the parliament approves it.

The move comes as only a third of registered taxpayers in Bangladesh file income tax returns.

This is because, taxmen say, many persons might have retired from their jobs and do not have taxable income. Some might have died. A portion of companies and firms might have gone out of business.

Bangladesh has around 88 lakh registered taxpayers or TIN-holders. Only 31.7 lakh filed their income tax returns as of April of the current financial year, according to the NBR data.

"There is no reason to keep TINs alive if someone dies. The same is true for others if they leave the country permanently or for companies if they liquidate. So, we have sought to incorporate the provision in the new law," said a senior official of the NBR.

As per the proposed rule, a person can request the NBR to make their TIN inactive if his or her taxable income is zero in the previous three years and is expected to remain zero in the future.

Anyone leaving the country for good will also be able to seek to make the TIN dormant or inactive. Persons who don't need to file tax returns will be allowed to seek de-registration, according to the proposed law.

The new provision also keeps the option for the NBR to make a TIN inactive or dormant if it finds that the taxpayer does not have any income, or registration was obtained to carry out financial crimes or launder money.

TIN-holders can also be struck off if they are found to be obtaining the number by providing fake information.

The NBR official said there are instances that people have secured TINs in the name of persons who pull rickshaws in order to evade taxes. In such cases, the NBR can make the TIN dormant.

"This will help the NBR establish a database of true and genuine taxpayers. It can then proceed to ensure compliance of registered taxpayers. This will be beneficial for many people."

Snehasish Barua, director of SMAC Advisory Services Ltd, said the scope for de-registration of e-TINs will be beneficial for both taxpayers and the NBR.