Deadline extension for tax matters on the cards

The government is likely to give relief to taxpayers from penalties for their inability to comply with deadlines during the shutdown, said finance ministry officials.

Officials are working to table a proposal to the government higher-ups to empower the National Board of Revenue (NBR) to relax rules related to issues that have time bar.

For example, employers have to submit statements of income tax filing by their employers within April 30 every year to avoid penalty. But this year, despite the willingness to do so, many firms could not do so for the shutdown enforced since March 26 to flatten the curve on coronavirus.

Besides, firms are required to deposit the tax deducted at source of goods and services of the current month within the first half of the following month.

There is also a time-related obligation regarding disposal of tax-related appeals in the present rules, said officials and firms.

None of these can be done on time for the shutdown.

Under the circumstance, the finance ministry plans to extend the deadline of time-bound issues equal to the period of lockdown, said officials.

"The government is considering these matters positively," said a senior official of the NBR seeking to remain unmanned.

Meanwhile, the revenue board is also working to extend the deadline regarding the filing of value-added tax (VAT) returns.

Last month, firms faced difficulties in handing in the VAT returns as they had to open their offices to prepare transaction statement after the NBR suddenly announced that its field offices would be open to receive returns of transactions in March.

Yet, the NBR got 31,000 returns last month, which is half of the number of returns it got the previous month, said officials.

"VAT return submission put us in a lot of trouble last month. Rules related to VAT return submission should be relaxed," said a senior official of a multinational company asking not to be named.

As per rules, businesses have to submit details of transactions of the previous month and deposit VAT paid by the end consumers to the state coffer within 15 days of the following month.

Firms have to pay a Tk 10,000 penalty for failure to submit VAT returns within the deadline.

They can also seek time for delayed furnishing of return but they have to pay 2 per cent simple interest monthly for delayed submission, according to rules.

On the one hand, the penalty and interest burden for delayed submission are adding to the businesses' operational costs during these days of shutdown.

And on the other hand, there was no way for them to apply to the VAT field offices seeking additional time as they were also closed as per the government directive.

And in the face of rising concerns and difficulties faced by businesses, Finance Minister AHM Mustafa Kamal last month said the deadline for returns submission would be extended.

But the extension is still not official. "We are still working on it," said a senior official of VAT asking not to be named as he is not authorised to speak with the media.