IMF wants online filing of corporate returns mandatory

To increase revenue collection, the International Monetary Fund (IMF) has suggested the introduction of online filing of income tax returns by large companies from the middle of this year. The agency has recommended the abolition of the existing tax exemption provisions through the National Board of Revenue (NBR) as well as not extending the existing tax exemptions after their expiry. Besides, the IMF has also advised the NBR to be strict in reducing tax deductions in the budget of the next financial year 2024-25.

The IMF said online filing of returns should be made mandatory for large companies in the country after June this year. Besides, online filing of returns should be made mandatory for corporates who receive any kind of incentives. If not, their incentives should be stopped.

Apart from this, they are ready to provide assistance in submitting corporate online returns and have the necessary software and computers for this purpose. In addition, the IMF has recommended the assessment of depreciation allowance rates and allowances for corporate income tax. The company says business losses can be carried forward for up to 10 years.

Similarly, the IMF is also in favor of canceling the tax exemption on income earned from the stock market by recommending the withdrawal of tax benefits given by the government on remittances or expatriate income and various types of bonds. Besides increasing the existing tax-free income limit in the individual sector, the organization has suggested raising the minimum tax rate from 5 to 10 percent.

The IMF has suggested restructuring of the personal income tax structure, abolishing tax exemptions against various allowances paid to government employees, non-exemption of pensions and gratuities, and removal of tax exemptions on house rent and medical allowances (which account for one-third of gross salary).

In a recent meeting with NBR Chairman Abu Hena Md. Rahmatul and senior officials, the IMF delegation visiting Dhaka placed this recommendation. In that meeting held at the NBR office in Agargaon, three officials named David Barr, Arvind Modi and David Wentworth were in the IMF delegation. Apart from NBR Chairman, top officials of Income Tax Department were also present.

It may be noted that, the IMF gave this prescription after approving a loan of 4.7 billion dollars for Bangladesh in January 2023.