Compliance with Proof of Submission of Return Regulations in Bangladesh: An Overview

Background

The Income Tax Ordinance and the Finance Act 2022 have outlined regulations for Taxpayers in Bangladesh who are obligated to submit Annual Income Tax Returns. As per these regulations, Taxpayers must display the Proof of Submission of Return (PSR) in a conspicuous place on their business premises. The PSR can be in the form of an Acknowledgement Receipt of Return of Income, a System Generated Certificate, or a Certificate issued by the Deputy Commissioner of Taxes. Non-compliance with these regulations may result in penalties imposed by the Deputy Commissioner of Taxes. It is advisable to comply with these regulations by displaying the most recent PSR to avoid any adverse consequences.

What is Proof of Submission of Return (PSR)?

In accordance with the provisions outlined in Section 184A of the Income Tax Ordinance 1984, a Taxpayer who is eligible for submitting an Annual Income Tax Return must demonstrate proof of submission in the form of a Proof of Submission of Return (PSR). The PSR can take the form of an Acknowledgement Receipt of Return of Income, a System Generated Tax Certificate that includes the name of the Taxpayer, the Taxpayer Identification Number (TIN), and the Tax year of submission, or a Tax Certificate issued by the Deputy Commissioner of Taxes (DCT) that similarly includes the Taxpayer's name, TIN, and Tax year.

As per Section 184A of the Income Tax Ordinance 1984, one of the following documents will be considered as PSR:

·????????Acknowledgement Receipt of Return of Income; or

·????????System Generated Tax Certificate duly mentioning the name of Taxpayer, TIN and Tax year of the concerned Taxpayer; or

·????????Tax Certificate issued by the Deputy Commissioner of Taxes (DCT) duly mentioning the name of Taxpayer, TIN and Tax year of the concerned Taxpayer.

Consequences of Non-Compliance

In the event of non-compliance with the tax regulations outlined under the Income Tax Ordinance 1984 and the Finance Act 2022, the Deputy Commissioner of Taxes may impose a penalty on the concerned Taxpayer.????????????????????????????????????????????????

·????????Not less than Tk. 5,000; but

·????????Not more than Tk. 20,000.

Recommendation

In accordance with the provisions of the Income Tax Ordinance, non-compliance with the requirements to display Proof of Submission of Return (PSR) may result in significant consequences. In light of this, it is recommended that taxpayers take proactive measures to ensure compliance by prominently displaying the most recent PSR at their business premises. This will help mitigate any potential risks and ensure a smooth adherence to the tax regulations.?

Reference

i) Income Tax Ordinance, 1984 (Section: 184A & 184C); and

ii) Finance Act, 2022.