The Financial Express

57,000 companies come under tax net

| Updated: March 12, 2021 20:28:47

57,000 companies come under tax net

An estimated 70 per cent or 57,000 companies have been brought under tax net in just three months, thanks to a document verification system (DVS).

A corporate compliance taskforce report of the National Board of Revenue (NBR) made the disclosure on Thursday.

The Institute of Chartered Accountants of Bangladesh (ICAB) earlier developed the DVS.

The revenue board said it could bring 100-per cent companies under tax net by this April.

Return filing (with time petition) by companies rose by 35 per cent in fiscal year (FY) 2020-21 for the DVS.

The growth was only 0.91 per cent in FY 2019-20.

Historically, the annual return filing growth was about 1.0 per cent only. But the NBR expects that company returns may double next year.

On November 12 last year, the NBR and the ICAB jointly launched the DVS to verity financials amid a surge in the submission of fake audit reports by corporate entities with income-tax returns.

The NBR also signed a memorandum of understanding with the ICAB on the use of the system.

The DVS generates a document verification code (DVC) for each report audited by an ICAB member and the code is then provided with it.

Income-tax officials consider an audit report fake if it does not contain any such code.

On December 01, the NBR made such verification mandatory to check submission of fake reports and ensure adequate revenue from the corporate sector.

On August 20, it formed a high-powered taskforce to bring all registered public and private limited companies under tax net.

The board also sought to ensure submission of tax returns and prevent fake audit reports as it found that over 56-per cent firms did not have taxpayer identification numbers (TINs).

Even more than 55 per cent of the business entities having TINs did not pay income tax, it revealed.

Though the submission of financial reports with income-tax returns is mandatory, it found that more than 50 per cent of the firms filed fake audit reports.

According to the NBR and the ICAB, more than half of the companies filed fake audit reports with their income-tax returns.

Members of the ICAB signed some 17,000 audit reports in FY 2019-20, although the number of tax returns was more than 35,000 in the year.

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