Firms with over Tk 2cr turnover likely under NBR scanner

Partnership firms, registering more than Tk 2 crore in annual turnover, are expected to require the submission of an audited financial statement along with returns as the tax authority seeks to include the provision in the new income tax bill. 

Also, the association of persons and operators of various types funds will also need to file audited financial statements alongside income tax returns, according to the Income Tax Bill 2023 placed by Finance Minister AHM Mustafa Kamal in parliament last week.

Tap Here to Add The Daily Star As A Trusted Source

A senior official of the National Board of Revenue (NBR) yesterday said it proposed including the provision in the new law to curb tax evasion and increase compliance.

"There are instances of many people forming partnerships to evade tax as such firms currently don't need to submit audited financial statements."

As these businesses were not needed to file audited accounts, there was an absence of compliance.

However, firms with less than Tk 2 crore annual turnover will remain out of the purview of the provision so that small and marginal businesses do not face increased compliance cost, he added.

In a paper, styled "Salient Features of Income Tax Act 2023", Snehasish Barua, director of SMAC Advisory Services Ltd, said partnership firms were not required to submit audited accounts under the Income Tax Ordinance 1984.

"The inclusion will bring about transparency in their businesses. They will have to maintain books of records and accounts properly. This will increase their cost of business but revenue collection will go up because of increased compliance."

Once passed by parliament, the new law will replace the Income Tax Ordinance 1984.