The government is preparing to introduce an exit policy for taxpayers, marking the first time such a provision will be implemented to free individuals, including expatriates, who have remained locked within the tax system indefinitely.
The revenue authority is expected to incorporate a deregistration provision into the law, allowing taxpayers to exit the tax net for various reasons.
This provision, set to be presented in the upcoming budget before Parliament on June 1, 2023, will allow taxpayers to apply for discontinuation of their Taxpayer Identification Number (TIN) by providing valid justifications to the tax authority.
Presently, once individuals obtain a TIN, they are unable to terminate or discontinue their registration even in the event of their death.
The official adds that introducing the deregistration provision would enable tax officials to focus on scrutinizing wealthier individuals and expanding the tax base rather than wasting time on inactive TINs.
Currently, there are 8.6 million TIN holders under the National Board of Revenue (NBR), with only around 3.2 million submitting tax returns.
Officials believe that implementing the ‘deregistration’ provision will narrow the gap between TIN holders and tax return submissions, shedding light on the number of actual taxpayers who consistently fulfill their tax obligations.
The ICT wing of the NBR will deactivate the TIN on its server based on instructions received from the relevant tax offices.
Introducing the deregistration provision in tax law has been a longstanding demand from taxpayers and tax authorities.
While the Company Act allows companies to wind up operations through specific procedures, tax registration of these companies has remained active for years due to the absence of a corresponding provision in tax law.
In the upcoming fiscal year, fiscal measures will also be devised to promote savings in commercial banks through Deposit Pension Scheme (DPS), aiming to enhance liquidity flow into the banking sector.
DPS holders will receive increased tax concessions worth Tk 10,000 per month or Tk 120,000 annually, up from the current Tk 5,000 per month or up to Tk 60,000 annually.
