TBT DESK: In a move to ease public access to savings tools, the government is set to lift the requirement of income tax return submission for investments of Tk 5 lakh or more in savings certificates. This change is expected to be included in the upcoming national budget for fiscal year 2025-26, according to sources from the National Board of Revenue (NBR).
Similarly, the obligation to show proof of tax return submission for opening fixed deposits of Tk 10 lakh or more in banks is also likely to be withdrawn. This marks a policy shift from recent years, where tax return documents-known as Proof of Submission of Return (PSR)-were made mandatory for accessing numerous services.
Under current regulations, individuals must submit PSRs for 45 different services, including obtaining trade licenses, credit cards, and registering land worth over Tk 10 lakh. The list also includes purchasing savings certificates above Tk 5 lakh and opening bank fixed deposits above Tk 10 lakh. These measures were originally introduced to increase the number of tax filers in the country. However, they have mostly led to a rise in "zero returns," without significantly increasing the number of actual taxpayers.
The burden of mandatory PSR submission has drawn criticism from both the public and professionals, as it caused delays and confusion, particularly for people with non-taxable income. A provision in the 2023 Income Tax Act allows for a penalty of up to Tk 10 lakh if the validity of submitted PSRs cannot be verified-further fueling concern.
Professionals such as doctors, dentists, lawyers, engineers, accountants, and architects are also likely to benefit from the upcoming policy shift. While PSR may no longer be required to obtain or renew membership in professional bodies, holding a Taxpayer Identification Number (TIN) will still be necessary.
An NBR official explained, "We are gradually removing PSR submission requirements where they are not practically needed. In such cases, only submission of a valid TIN will suffice."
The interim government is aiming to introduce a more citizen-friendly tax policy in the upcoming budget by reducing bureaucratic hurdles, while continuing efforts to improve genuine taxpayer compliance.