As Bangladesh's economy continues to grow, the importance of a transparent and accountable revenue system has become increasingly evident.

In this context, Section 264 of the Income Tax Act provides clarity on how the state's taxation framework functions and why it is crucial for citizens to comply with its provisions.

A significant shift has occurred in the role of tax returns, transforming them from a mere administrative task into an essential tool for economic identity.

Proof of tax return filing or submission—whether in the form of a return receipt, a system-generated certificate, or a certificate from the deputy commissioner of taxes—has become mandatory for a wide range of personal, business, and administrative activities.

Proof of return submission is now a requisite in 43 sectors, including activities such as taking loans exceeding Tk 20 lakh, renewing trade licence, acquiring import registration certificates (IRC) or export registration certificates (ERC), registering property, and securing utility connections like gas and electricity.

It is also required for activities such as renewing professional memberships, purchasing large deposit or savings certificates, and for various business-related processes, including tender submissions, submission of bill entries, and renewing business licenses for hotels, restaurants, hospitals, and agencies.

This expansion underscores that tax returns are now a fundamental part of economic and administrative interactions in sectors with regular financial transactions.

However, certain exceptions to this rule exist. For acquiring a new trade licence from a city corporation or municipality, registering a cooperative society, obtaining a new licence for general insurance surveyors, applying for and renewing credit cards, or gaining new membership for professionals such as doctors, dentists, lawyers, chartered accountants, cost and management accountants, chartered secretaries, actuaries, engineers, architects, and surveyors, a system-generated certificate must be submitted.

This also applies to opening a postal savings account with a balance exceeding Tk 500,000, receiving government financial benefits for MPO-listed employees of grade 10 or higher, engaging in financial activities like MFS, mobile banking, e-transfers, or earnings from recharge commissions, paying stamp and court fees, registering cartridge paper vendors or deed writers, registering three-wheeled vehicles, transferring ownership, renewing fitness, acquiring an e-commerce business license, and for any entity, other than individuals, registered, incorporated, or formed under any law in the current or the subsequent year.

Similarly, those not mandated by law to file returns are exempt from providing proof of return filing or submission.

The legal implications of non-compliance are significant. If any officer or organisation issues a licence or approval without verifying the proof of return filing, the responsibility falls on them.

The deputy commissioner of taxes has the authority to impose fines of up to Tk 10 lakh, with the right to be heard before such penalties are applied.

This provision emphasises the importance of accountability not just for taxpayers, but also for service providers, thereby strengthening the tax administration's ability to ensure compliance.

Under Section 265 of the Income Tax Act 2023, taxpayers who are required by law to file returns and carry-on business are required to display the proof of filing returns at a place in the business establishment so that it is easily visible to the public.

Failure to comply with this requirement can lead to fines ranging from Tk 20,000 to Tk 50,000.

The rationale behind these measures is clear: to bring all economic participants within the scope of the tax net.

Economists argue that this is vital for the sustainable development of the country. Tax return submission is no longer just an annual obligation but a year-round validation of a citizen's financial activities, whether they are a business owner, a professional, or an investor.

The digital tax system has streamlined the process of filing returns, but the rules have become more stringent.

The consequences of non-compliance are now more far-reaching. Individuals and businesses may face disruptions, such as loan rejections, suspension of business licences, or denial of essential services.

The state has made it clear that regular tax return submission is not only a legal duty but also a cornerstone of economic participation, financial transparency, and civic responsibility in Bangladesh.

In summary, the submission of tax returns in Bangladesh has evolved into a critical component of the country's economic framework.

It is no longer a simple administrative task but a symbol of engagement in the national economy and a reflection of an individual's or organisation's commitment to financial integrity.

In this new economic era, filing returns is an essential aspect of both legal compliance and social responsibility.

 

The writer is a financial sector analyst. He can be reached at [email protected]