Tax return filing deadline extended for companies

The National Board of Revenue (NBR) has extended the deadline for companies in Bangladesh to submit their tax returns for the 2022-23 income period until June 15 this year, according to a notice issued yesterday.

The benefit will be applicable for companies that sought time from the tax authority to file tax returns, said the notice signed by Md Mohidul Islam Chowdhury, second secretary of tax policy at the NBR.

Tap Here to Add The Daily Star As A Trusted Source

The move comes as many companies that follow the July-June financial year could not file returns even after seeking time since the end of Tax Day, which is on January 15 every year.

Taxmen say a large number of companies could not file returns this year as they could not complete the preparation of their annual reports in compliance with the NBR rule of submitting tax returns using the Document Verification System (DVS), said NBR officials.

The DVS is digital system developed by the NBR and Institute of Chartered Accountants of Bangladesh (ICAB) in November, 2020, to prevent the submission of falsified accounts along with tax returns to evade taxes.

The move comes as many companies that follow the July-June financial year could not file returns even after seeking time since the end of Tax Day, which is on January 15 every year.

The tax authority in December the same year made the use of DVS mandatory to ensure that businesses deposit their due amount of corporate income tax to the state coffer.

Through this digital system, ICAB members have to provide five key financial data on the company they are auditing. This includes the firm's profits, turnover, total assets and the company's liability for a stipulated period.

A top official of the NBR said many companies applied for additional time to comply with the rules.

"So, instead of giving time on a case-to-case basis, we have allowed time for the companies that sought time to file returns of their income for the year 2022-23," the official added.

"This is going to give them breathing space."

Companies account for roughly 60 per cent of the total income tax -- the second biggest source of revenue -- collected by the NBR each year.

During the last fiscal year, nearly 29,000 companies filed tax returns.

Around 19,000 companies filed tax returns for fiscal year 2022-23 until May this year.

The NBR official went on to say that companies will have to pay 2 per cent monthly interest on payable taxes for submission of returns after the usual deadline.

Hasan Mahmood, a director of the Metropolitan Chamber of Commerce and Industry, said the decision of time extension will be beneficial for companies that missed the deadline.

"They will get time to prepare their tax returns and submit. Otherwise, they would face a lot of penalty," added Mahmood, also a partner of MJ Abedin & Co, a chartered accountancy firm.