NBR Nixes ‘Zero Return’ Rule
Taxpayers will not be able to self-determine their tax amounts online, the National Board of Revenue (NBR) has clarified. As a result, the income tax column in the relevant form on the NBR website cannot be left at “zero”; instead, taxpayers must provide details of both income and expenditure. The payable tax will then be automatically calculated and displayed online.
The NBR’s latest press statement on so-called “zero returns” has reignited debate on whether declaring zero tax could lead to penalties. Addressing this, the NBR reiterated that while there is “zero tax,” there is no such thing as a “zero return” — and it is the board, not the taxpayer, that determines zero tax.
According to the August 10 press release, the Income Tax Act contains no provision for filing a “zero return.” Taxpayers are required to accurately declare their actual income, expenditure, assets, and liabilities in their returns. Those with an annual income below Tk 375,000 are exempt from paying tax, but when filing, they must still provide detailed statements of income and expenditure, including earnings from businesses, bank interest, or assets.
The NBR also warned against misleading information circulating on social media, where certain individuals claim they can file “zero returns” on behalf of taxpayers. This practice — showing all figures as zero without disclosing income and expenses — is “completely illegal” and constitutes a criminal offense under the law.
Providing false or misleading information in income tax returns can lead to imprisonment of up to five years under Sections 312 and 313 of the current Income Tax Act.
Individual taxpayers must file their annual returns between July 1 and November 30, declaring their yearly income and expenses. Under the 2023 Act (Law No. 12, Section 2/69), both resident and non-resident individuals are taxed on total income: the first Tk 375,000 is tax-free; the next Tk 300,000 is taxed at 10 percent; the following Tk 400,000 at 15 percent; the next Tk 500,000 at 20 percent; the next Tk 2 million at 25 percent; and the remaining amount at 30 percent.
Bangladesh currently has 12.3 million registered Tax Identification Numbers (TINs), but only about 4 million entities, including 13,100 institutions, file returns. Of these, 70 percent pay no tax due to incomes below the exemption threshold. To curb revenue loss, the government is moving to close loopholes and enforce provisions against underreporting income to evade taxes.
