Few taxpayers respond to tax return incentive in initial phase

Bangla Press Desk: The government’s new incentive for individual taxpayers to file income tax returns in the first quarter of the tax year has so far drawn 631,000 online filings, according to the National Board of Revenue.

The NBR introduced the new system from the 2026-27 tax year, allowing individual taxpayers to file returns throughout the year while offering a tax incentive to those who file during the July-September first quarter.

With the first quarter nearing its end, around 25,000 taxpayers are filing returns online each day. At that pace, the number of online filings was expected to reach about 680,000 by Tuesday.

In the 2025-26 tax year, around 4.95 million taxpayers, including individuals and companies, filed returns. The number of taxpayers holding Taxpayer Identification Numbers stood at 13.1 million, of whom around 4.7 million individual taxpayers filed their returns online.

Compared with the total number of TIN holders, a large number of taxpayers have yet to respond to the first-quarter incentive.

However, the full response to the first-quarter incentive will only become clear after the Sept 30 deadline.

Several NBR officials at both field offices and the board believe many taxpayers may be declaring zero income or income within the tax-free threshold as limited-income earners struggle to keep pace with inflation amid pressure on the broader economy.

The trend is also reflected in the revenue collected against the returns filed, the officials said.

From the 631,000 returns submitted by Sunday, the government collected approximately Tk 2.16 billion in direct income tax revenue.

NBR officials noted that immediate tax collection appears lower because substantial revenue is deducted at source throughout the year.

Advance income tax collected from vehicle owners yielded Tk 570 million, source tax on savings certificate interest generated Tk 3.04 billion, bank interest tax accounted for Tk 1.6 billion, and advance tax from other sectors totalled Tk 8.8 billion.

The NBR launched its e-return service on Jul 22 to allow taxpayers to claim the incentive by filing in the first quarter.

Under the provision, individual taxpayers filing between July and September will receive an incentive equivalent to 5 percent of their net tax payable, capped at Tk 25,000.

The incentive will not apply to returns filed after Sept 30, while additional tax will apply to returns filed after December.

Who Can File Paper Returns

The NBR has again made online filing mandatory for individual taxpayers through a special order.

However, taxpayers aged 65 or above, those physically unable to file online or with special needs subject to certification, Bangladeshis living abroad, representatives filing on behalf of dead taxpayers, and foreign nationals working in Bangladesh can file paper returns instead.

Individual taxpayers who cannot file online because of registration problems with the e-return system may also file paper returns with approval from the relevant additional or joint tax commissioner.