Bangladesh

Calls ring out for deadline extension

With only two working days remaining for filing income tax return, taxpayers are in a hurry to gather and prepare related documents. 

Many are halfway through while a good number of individual taxpayers have to go to isolation this month after becoming Covid positive, eagerly waiting for an announcement of the extension of returns submission deadline from the tax authority.

"I became (Covid-19) positive just as I was about to prepare my tax returns," said a mid-level female executive of BASIC Bank, seeking to remain unnamed, as she did not want her near ones to start worrying.

"Now, I am in isolation in a room with my son. I would not be able to go to my office before next month," she said.

She could not prepare and submit returns early because of delays in gathering all the tax-related documents.

The banker said the government should extend the deadline for submission of tax returns considering the pandemic and spike in infections.

"Many of my colleagues are positive now. If the government really wants to encourage honest taxpayers to comply and pay tax, it should extend return filing period at least by 15 days," she said.

Apart from her, leading chambers and tax lawyers joined the call for an extension of the deadline as the rogue virus is infecting an increasing number of people.

The official time for tax return filing starts from July 1 every year and ends on November 30, termed as the Tax Day.

A taxpayer can file returns for the next the four months after the deadline by availing time extensions from tax offices. However, submission after the deadline is subject to 2 per cent monthly interest on the payable tax amount as per rule.

The National Board of Revenue (NBR) kept the period unchanged this year.

However, taxpayers said the two-month-long shutdown devastated incomes of many taxpayers as the economic activities plunged to historic lows during the April-May period of this year.

The shutdown and the continuation of new people getting infected every day affected regular office activities even after the government removed the restrictions from June.

Preparation of salary statements for employees by many offices was delayed while the collection of other required documents by taxpayers affected.

"We had to wait for getting papers for a longer period this year than the previous year because of the pandemic," said banker Mahmud Hasan.

"There are many who have been limited to homes after reporting positive. It would be a great respite for many if the government increases the time by 20 to 30 days," he said.

Nihad Kabir, president of the Metropolitan Chamber of Commerce and Industry (MCCI), said there appears to have been a sudden change in the Covid situation and concerns about a second wave was growing.

"We see a sudden rise in the infection numbers. It has become difficult to complete all the documentation required to be submitted because many people are unwell," she said.

The second thing is that this year there is no scope to file returns online.

So, she said, it would create another health hazard to have so many people trying to submit their returns on the last day, "which we know always happens".

"Everybody will be trying to submit returns all at once. So to avoid further aggravating the situation, we would request that the NBR be kind enough to extend the time for submission," she said.

The MCCI president suggested for the revenue authority to consider staggering return submission and payment hours to avoid large crowds at a tax office or banks at a time.

"An increasing number of people are becoming Covid positive. And they include taxpayers, tax lawyers, bankers and even tax officials," said Syed Iqbal Mostafa, president of Dhaka Taxes Bar Association (DTBA).

"Taxpayers have to spend more time in banks to pay tax. Considering this and loss of jobs and incomes, we have appealed to the NBR for extension of the deadline," he said.

"Many senior taxpayers are afraid of visiting banks to pay tax while a number of our clients are sending documents by email," he said.

Iqbal said the NBR has legal tools in its hand as the parliament this June added a provision in the income tax law empowering the tax authority to waive or extend the time to enable taxpayers to comply.

Citing news reports in the media, Iqbal said India extended its deadline until December this year to facilitate tax payment by its citizens.

"We appealed for two months until January 30," he said, adding that tax lawyers from various districts also urged the NBR to provide the extension.

"The extension will increase revenue collection," said Iqbal.

Asif Ibrahim, chairman of Chittagong Stock Exchange (CSE), said retail investors of the capital market and small business owners had been affected by the economic woes caused by the impacts of the pandemic.

"Hence we request the NBR to extend the filing deadline without the penalty," he said.

Shams Mahmud, president of Dhaka Chamber of Commerce & Industry (DCCI), echoed them.

"The business community as per a directive of the government has started to be careful regarding social distancing as the rate of transmission is going up," he said.

"Also with the change in season, people are catching a cold. Considering everything, the government should extend the time by a minimum of one month," he said.

Also, any form of penalty, especially during this time, will be a heavy burden on businesses, especially the micro, small and medium enterprises. "We expect the NBR to allow a time extension keeping in mind this year's special circumstances," he said.

A senior official of the NBR's income tax wing said taxpayers get five months to submit returns. "Taxpayers could have filed income tax returns had they wanted to," he said.

He, however, said the NBR was reviewing the situation.

"We are collecting information on return submission from field offices this year and the previous one to get a comparison of submissions. Let us see the data," he said in response to the demands for extension of the deadline.

Bangladesh has 55 lakh registered TIN holders as of now. Last year, the NBR received nearly 22 lakh returns, according to the officials.

All registered taxpayers will have to submit income statements irrespective of whether they have taxable income or not.

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