The National Board of Revenue Chairman, Abu Hena Md Rahmatul Muneem, acknowledged flaws in the new income tax law, mentioning efforts are ongoing to address them.

He also highlighted a significant gap between the estimated number of people capable of paying taxes (3 to 3.5 crore) and the actual number currently paying taxes (35 lakh) during a seminar on Thursday on National Income Tax Day 2023.

There seems to be a discrepancy in tax compliance based on the latest survey by the Bangladesh Bureau of Statistics, he said.

However, the NBR's decision to extend the deadline for individual taxpayers to file returns by two months, beyond November 30, reflects a lower submission rate compared to the previous year.

With slightly over 19 lakh returns as of 27 November, there seems to be a notable decrease from the 36 lakh returns submitted last year.

The extension provides additional time for taxpayers to fulfill their filing obligations.

The seminar featured Attorney General AM Amin Uddin as the chief guest, with NBR Member (Tax Policy) Shams Uddin Ahmed presenting a keynote paper.

Deputy Attorney General Samarendra Nath Biswas and NBR members Masud Sadiq and Syed Abu Daud also spoke at the event.

Notably, the Income Tax Law 2023, effective from 22 June, replaced the Income Tax Ordinance 1984, introducing constraints on the discretionary powers of income tax officers.

The corresponding Income Tax Bill 2023 had been passed in parliament on 18 June.

As per the law, the specific tax rate for buying more than 200 square meters of building spaces or apartments in upscale areas like Gulshan Model Town, Banani, Baridhara, Motijheel commercial area, and Dilkusha will increase to Tk6,000 per square meter, up from the proposed Tk5,000. Similarly, in municipalities within district towns, the specific tax amount will now be Tk800, up from the initially proposed Tk700.

The newly enacted law allows the NBR to amend any provision, excluding those related to tax imposition or increase, through a gazette notification. Notably, the changes in the law incorporate significant adjustments based on recommendations from the Parliamentary Standing Committee on the Ministry of Finance.

Under the new law, saving certificates will be considered as securities for taxpayers to qualify for tax rebates, and a 5% source tax will be deducted from their interest payments, treated as a minimum tax. This represents a reduction from the previous fiscal year, where the source tax on savings certificates was 10%.

Additionally, companies with a turnover below Tk3 crore are exempt from submitting a certified financial statement by a chartered accountant along with their tax return. However, companies with an annual turnover exceeding Tk3 crore are required to submit a financial statement as part of their filing obligations.