Coming separate TIN for non-taxable

Reform to remove TIN-tax receipt mismatch

| Updated: February 13, 2023 15:51:51

Coming separate TIN for non-taxable

A major overhaul in the existing TIN system has been planned for introducing temporary registration number for marginal- income people, which may remove a current tax-receipt mismatch.

Under the government plan, sources said, the temporary TIN or tax- identification number can be obtained for receiving services where TIN is mandatory and closed after the work is done.

A senior official of the National Board of Revenue (NBR) said they were proceeding with the steps with the help of IT team of the board.

He said necessary provision on implementation of the purposive TIN might be incorporated into the budget for fiscal year 2023-24.

Currently, TIN is mandatory for obtaining different services from public and private entities. Many of the people having below taxable income are compelled to obtain TIN for this reason.

In the Income Tax Ordinance 1984, there is no provision to shut down or close the TIN if anybody obtains it once.

Tax officials said the NBR has moved to clean up the TIN database again in a bid to remove the inactive TINs.

Around 1.0 to 1.2 million TINs might be found inactive after screening the database.

Earlier, the NBR had cleaned the TIN database in 2013 to remove the accounting mismatch.

A field-level tax official said the taxmen will have to spend a considerable time following up people having TIN but not submitting tax returns.

The time and efforts do not pay off much as most of those types of taxpayers are from marginal-income group who obtained TIN for any specific purpose.

"It is burdensome for those people too as they got panicked after getting notices of non-compliance from the tax department," he added.

Taxmen would be able to intensively follow up and chase big fishes if the existing TIN database cleaned through removing inactive ones, the tax official said.

"Civil societies often also point finger at the taxmen's capacity due to such a large gap between the number of TIN and tax-return submission," the official lamented.

Currently, some 8.5 million people have TIN while 2.8 million (until December 31, 2022) submit tax returns to the NBR.

Homemakers, senior citizens and many other marginal-income people have obtained TIN for availing different services, including opening and continuation of bank accounts, purchasing savings certificates etc.

From the current FY, the NBR made submission of proof of tax return mandatory for 38 types of services. Also, submission of tax return is mandatory for all of the TIN holders, except few exceptions.

The provision has pushed some marginal-income people in problems. Many of them have submitted nil tax returns complying with the provision.

Field-level taxmen said the number of tax returns from marginal people comprises a large portion of this year's tax returns.

They said the growth in tax-return submission would not contribute to the major share of revenue for this reason.

The NBR expects additional 1.0 million tax returns this year.

The NBR collects 58-percent taxes from the corporate taxpayers while the rest comes from other sources, including individual taxpayers.

This year, until the deadline January 2, 2023, individual taxpayers had paid Tk 41 billion in taxes against their tax returns.

Last year, some 2.3 million taxpayers submitted their tax returns paying Tk 32.81 billion worth of taxes in this period.

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