Industry Desk: Transparency International Bangladesh (TIB) has commended the National Board of Revenue (NBR) task force for identifying about 80,000 companies not being taxed at present, and for the ongoing process and initiatives of the NBR to integrate them into the existing tax system.
The TIB called for an investigation into how such a large number of companies have been outside the tax system so far, how much tax evasion has happened, and to identify procedural weaknesses of all institutions concerned to prevent such incidents from recurring in the future.
In a statement yesterday, TIB Executive Director Dr Iftekharuzzaman said, “The NBR’s Corporate Compliance Task Force’s discovery of a large number of companies outside the net proves the extent of financial irregularities, corruption, and lack of good governance in the country. A registered company has been doing business for half a century but has never paid taxes. Again, 1,400 companies are registered at only two addresses or the same person is the director of 46 companies but has only four TIN.”
“This information also shows irregularities and financial mismanagement of fairy tale proportions. This huge number of companies did not start practising tax evasion overnight. This situation has arisen due to the connivance of many concerned. In addition to holding them accountable, it is important to identify the procedural and institutional weaknesses and to address them quickly,” he added.
Iftekharuzzaman fully agrees with the preliminary report of the task force on non-TIN companies, titled “Tragic picture of a country mired in corruption” and “Lack of good governance in the country’s financial sector”.
He added that the Registrar of Joint Stock Companies and Firms does not have any system to identify joint venture companies and firms, even though more than a hundred companies are registered at one address. It is equally clear that the irresponsible behaviour of a class of law firms is equally responsible for the registration.
Even though more than 78,000 businesses have TINs, only 26,000 have filed income tax returns and half of them have submitted fake audit reports and evaded a lot in taxes. Therefore, to prevent such incidents in the future, it is necessary to formulate effective strategies now and ensure technical connectivity and coordination between the agencies, he said.
“The sincere efforts of all concerned are essential so that everyone, including businesses, can play the desired role in the country’s economy by paying taxes in a hassle-free and easy manner. At the same time, we urge all businesses to be vigilant in the ongoing process of taxation so that they are not harassed,” said Iftekharuzzaman.
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