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Bangladesh - March 20, 2024

IMF wants mandatory online filing of corporate tax returns

Staff Correspondent : To increase revenue collection, the International Monetary Fund (IMF) has suggested the introduction of online filing of income tax returns by large companies from the middle of this year. The agency has recommended the abolition of the existing tax exemption provisions through the National Board of Revenue (NBR) as well as not extending the existing tax exemptions after their expiry.
Besides, the IMF has also advised the NBR to be strict in reducing tax deductions in the budget of the next fiscal year (2024-25).
Recently in a meeting with National Board of Revenue Chairman Abu HenaRahmatul Mumen,the IMF delegation told this. They gave several recommendations and suggestions to NBR in the meeting.
According to NBR sources, three officials named David Barr, Arvind Modi and David Wentworth were in the IMF delegation in the meeting held at the NBR office in Agargaon of the capital. Apart from NBR Chairman, top officials of Income Tax Department were also present in it. In the meeting, the IMF said that after June this year, it is necessary to make online return submission mandatory for large companies in the country. Besides, online filing of returns should be made mandatory for corporates who receive any kind of incentives. If not, their incentives should be stopped. Apart from this, they are also ready to provide assistance in filing corporate returns online. They have necessary software and computers for this. In addition, the IMF has recommended the assessment of depreciation allowance rates and allowances for corporate income tax. The company says business losses can be carried forward for up to 10 years.
In addition, private taxpayers now enjoy tax exemptions on housing and medical allowances (which amount to one-third of gross salary), a benefit the IMF has recommended to be scrapped. The agency has also said that there will be no tax exemption against various types of allowances given to government employees. This includes non-taxation of pension and gratuity.
Besides, the IMF has recommended withdrawal of tax benefits given by the government on remittances or expatriate income and various types of bonds. The organization is also in favor of canceling the tax exemption on income earned from the stock market. The IMF has also suggested raising the minimum tax rate from 5 to 10 percent along with increasing the existing tax-free income limit for individuals.
It is reported that the IMF has advised the NBR to restructure the personal income tax structure. The organization has proposed to increase the tax-free life limit of an individual from Tk 3.5 lakh to Tk 5 lakh. It has suggested withdrawal of tax benefits on remittances and expatriate income. The IMF has also proposed abolishing ‘depreciation allowances’ for mining and petroleum extraction.
In January 2023, the IMF approved a loan of 4.7 billion dollars for Bangladesh. After that, the IMF delegation held a meeting with several regulatory agencies of the country’s financial sector, including Bangladesh Bank and NBR.

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