Culture of deadline extension for tax returns may go

The National Board of Revenue is considering putting an end to the culture of deadline extension for tax returns submission from next fiscal year by introducing a definite cut-off day for furnishing annual income statements.

The plan is likely to be unveiled early next month, when Finance Minister AMA Muhith will place the budget proposal for fiscal 2016-17, said insiders.

Taxpayers may have to pay a fine if they submit their returns after that day, NBR officials said.

To introduce the day, the revenue authority is likely to propose for revising the provisions related to the submission of income tax returns.

At present, individual taxpayers can furnish their returns between July 1 and September 30 every year.

But the deadline to submit income tax returns is extended almost every year in the face of demand from various trade bodies and professional groups, which some taxmen believe cause delays in scrutiny and audit of the submitted returns.

Since deadline extension has become the norm, taxpayers are not compelled to file their returns within the original window. Subsequently, the volume of submitted returns tends to be low until September 30, said taxmen.

Last year, the NBR extended the deadline for income tax returns by two months to November 30. In 2014, the deadline was extended twice, and the year before, thrice to December 31.

Insiders said the introduction of the cut-off or tax day will end the practice of time extension in general.

However, individual taxpayers will be able to get additional time by applying to field tax offices explaining the reasons of delay.

Currently, countries such as the US have a fixed date for tax return submission. It usually falls around April 15.

Taxmen said the government will get the revenue in time for fixation of a cut-off day. It will also bring in fiscal discipline, they added.