Income Tax Related Laws in Bangladesh:

Income Tax Related Laws in Bangladesh

Taxes are the first and foremost sources of public revenue. Taxes are compulsory payments to Government without expecting direct benefit or return by the tax payer. Taxes collected by Government are used to provide common benefits to all mostly public welfare services. Tax revenue is generated from taxes on income, profits and capital gains, taxes on goods and services. 

Income Tax is a typical example of direct tax. The Tax is imposed on a person or entity under the orbit of Income Tax Law in called income tax. It is imposed on a person in relation to his income. It is calculated and assessed with reference to the income of an assessee for a given year. In this article we will discuss only about the existing Income Tax related Laws in Bangladesh. 

Income Tax Related Laws in Bangladesh:

In order to determine Income Tax on the income of an assessee in Bangladesh, certain provisions, rules and regulations have to kept in mind. They are as follows: 

The Income Tax Ordinance 1984 came into force on 1st July, 1984 as Income Tax Manual I. It has 23 Chapters, 187 Sections, numerous sub-sections and seven schedules containing provisions regarding assessment, penalty, appeal etc. It also lays down the powers and duties of the various Income Tax Authorities. 

Every act normally gives power to an authority responsible for implementation of the Act, to make rules for carrying out purposes of the Act. Section 185 of the Income Tax Ordinance 1984 has given power to the National Board of Revenue to make such rules named Income Tax Rules 1984. 

To give effect to the various proposals in the annual budget covering the areas of direct and indirect taxes, Finance Act is issued. It contains various applicable tax rates and other amendments of the Income Tax Ordinance and Rules 1984. 

According to Section 185 of the Income Tax Ordinance 1984 National Board of Revenue can issue certain orders and circulars as and when necessary. The provisions of these SROs are also to be considered at the time of computing income tax like the provisions of Income Tax Ordinance and Rules 1984. 

  • Judicial Decisions:

In the course of assessment proceeding, there may sometimes arise a dispute between the National Board of Revenue and the assessee over the interpretation of some of the provisions of the act and rules. The assessee can go to the Court objecting the National Board of Revenue’s interpretation  and the Judgments given by the Court act as guidance to the assessing officers and the assessee in similar circumstances in the future. 

Income Tax Authority in Bangladesh:

National Board of Revenue (NBR) is the Highest Tax authority in Bangladesh. It was established by the President’s Order No. 76 of 1972. It is under the Internal Resources Division (IRD) of the Ministry of Finance. The Secretary of IRD is the ex-officio Chairman of the NBR. 

Income Tax Authorities: 

  • National Board of Revenue,
  • Chief Commissioner of taxes,
  • Director General of Inspection (Tax),
  • Commissioner of Taxes (Appeals),
  • Commissioner of Taxes (LTU)
  • Director General (Training),
  • Director General Central Intelligence Cell (CIC),
  • Commissioner of Taxes,
  • Additional Commissioner of Taxes (Appeal/Inspecting),
  • Joint Commissioner of Taxes(Appeal/Inspecting ),
  • Deputy Commissioner of Taxes,
  • Tax recovery officer,
  • Assistant Commissioner of Taxes,
  • Extra Assistant Commissioner of Taxes,
  • Inspectors of Taxes.