Govt rethinks mandatory tax proof for 12 services

Mandatory furnishing of Proof of Submission of Return (PSR) for securing a plethora of services as a measure of boosting government revenues is being derogated for certain service deliveries to remove unwanted hurdles.

The initial move to mandate PSR played a significant role in increasing income-tax -return submissions, officials say. Bu the interim government now opts to ease the precondition for some services where it was deemed "illogical".

Experts note that the government still places emphasis on PSR enforcement in relevant sectors to cast wide the tax net and enhance revenue receipts-a strategy that has delivered the goods over the past few years.

Officials at the National Board of Revenue (NBR), speaking to The Financial Express on condition of anonymity, said the latest decision aimed to simplify procedures, especially for services that were previously subject to the PSR requirement without sufficient justifications.

Echoing this view, Snehasish Barua, a chartered accountant and director of SMAC Advisory Services Ltd, says the mandatory PSR submission was unnecessary for certain services. "Overall, the PSR requirement is expected to broaden the tax base and foster a culture of tax compliance and to increase return submissions."

Under provision of the just-unveiled Finance Ordinance 2025, twelve services will now require only the submission of a system-generated Taxpayer Identification Number (TIN) certificate instead of full tax- return documentation.

With the policy change taking effect from the new fiscal year, starting July 1, individuals will be able to access services such as credit card and e-commerce business licences with just a system-generated TIN certificate.

Under the revised policy, obtaining a new trade licence within city corporations or municipalities, registering a cooperative society, or receiving a licence as a general insurance surveyor will no longer require PSR submission.

Similarly, applying for or renewing a credit card and gaining membership in professional bodies -- such as those for doctors, dentists, lawyers, chartered accountants, cost-and management accountants, chartered secretaries, tax lawyers, actuaries, engineers, architects, and surveyors -- will now require only a TIN certificate.

Additionally, opening a post-office savings account exceeding Tk 500,000 and receiving government payments at Grade-10 level or above under MPO inclusion are now exempt from the PSR prerequisite. The same exemption applies to individuals earning commissions, fees, or income through mobile financial services, mobile banking, electronic fund transfers, or mobile-phone recharges.

Other services no longer requiring PSR include (a) registering or being licensed as a vendor or deed-writer for stamps, court fees, or cartridge paper (b) registering or transferring ownership of three-wheelers, renewing their fitness certificates (c) obtaining an e-commerce business licence (d) incorporating or registering any non-individual entity formed under legal authority.

All of these may now be accessed with a system-generated TIN certificate.

Previously, return-submission proof was mandatory for 45 services. Following this adjustment, the number has come down to 39.

Bangladesh has approximately 11.39 million registered TIN-holders. However, only about 4.6 million of these individuals submitted income-tax returns in the last tax year, indicating that nearly 7.3 million TIN- holders have yet to comply with filing requirements.

In comparison, return submissions stood at around 2.5 million in the tax year 2021-22, reflecting significant progress in expanding the tax base--partly driven by policy changes such as the PSR requirement.

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