Filing Taxes in Bangladesh? 5 Surprising Truths About the e-Return System

 Filing Taxes in Bangladesh? 5 Surprising Truths About the e-Return System

For many individual taxpayers in Bangladesh, the approach of the annual November 30th deadline brings a familiar sense of stress and confusion. Filing income tax returns has traditionally been seen as a complex, paper-laden task. However, the landscape of tax compliance is rapidly changing with the National Board of Revenue's (NBR) e-Return system, a modern digital solution designed to streamline and simplify the entire process.

The move to an online platform is more than just a change in format; it represents a fundamental shift in how tax administration functions. While the benefits of convenience and faster processing are clear, the e-Return system and the updated Income Tax Act 2023 have introduced several new rules and features that many taxpayers may not be aware of.

This analysis aims to cut through the complexity and reveal five surprising and impactful facts about the online tax filing system in Bangladesh. Understanding these key points can make your journey to tax compliance easier, clearer, and far more manageable, whether you're a seasoned filer or a first-timer.

You might need to file a return even if you don't owe any tax.

One of the most significant policy shifts under the Income Tax Act 2023 is the expanded requirement to file a tax return. Previously, many believed that filing was only necessary if their annual income exceeded the tax-free threshold. This is no longer the case. The obligation to file now extends to a much broader group of individuals, driven by the need for a "Proof of Submission of Return" (PSR). Crucially, the PSR verifies that you have submitted your return, regardless of whether you owed any tax.

This PSR document has become a mandatory prerequisite for accessing an expanded list of over 40 essential services. In effect, filing a tax return is now a gateway to full participation in the country's formal economy. If you need to access any of the following common services, you will be required to show proof that you have filed a return:

• Applying for or renewing a trade license.

• Applying for a loan over BDT 5 lakh from a bank or financial institution.

• Applying for a credit card.

• Registering land, a building, or an apartment in a city corporation or municipality.

• Applying for or renewing the registration of a motor vehicle.

• Obtaining or maintaining a commercial gas, electricity, or water connection.

• Submitting a bill of entry for import or export.

• Participating in a tender.

• Obtaining or renewing membership of a professional body.

• Admissions for children in English medium schools with annual fees over BDT 1 lakh.

This strategic shift effectively leverages the tax system as a tool to formalize the economy, increasing the number of registered filers and expanding the NBR's visibility into economic activity, even from those who don't have a direct tax liability.

The tax-free threshold isn't one-size-fits-all.

While the government sets a general tax-free income limit, it’s a common misconception that this figure applies to everyone equally. The tax code includes specific provisions to offer greater relief to certain segments of the population. For the income year 2024-2025 (assessment year 2025-2026), the tax code establishes different thresholds based on a taxpayer's status.

Here is a clear breakdown of the special tax-free thresholds:

• BDT 350,000 for general individual taxpayers.

• BDT 400,000 for female taxpayers and senior citizens (65 years and older).

• BDT 475,000 for persons with disabilities.

• BDT 500,000 for gazetted war-wounded freedom fighters.

This tiered system is a significant policy feature, demonstrating a commitment to social fairness by reducing the tax burden on specific demographic groups. These tailored thresholds are part of a broader NBR strategy to simplify compliance for different segments of the population, which also includes offering a streamlined one-page return for those with straightforward financial lives.

Your phone is the key to your account—and it needs to be verified.

To register for an e-Return account for the first time, a taxpayer needs more than just their Taxpayer Identification Number (TIN). A critical and often overlooked prerequisite is having a mobile phone number that is biometrically verified against your National ID (NID).

The e-Return system uses this link for a crucial security check during the registration process. When a new user signs up, the system cross-references the mobile number they provide with the NBR's NID data. If it finds a match, an OTP (One-Time Password) is sent to that number to complete the registration.

From a data security perspective, this is a critical integration. This security measure is not unique to the tax system but is part of Bangladesh's wider push towards a 'Digital Bangladesh,' where a verified digital identity is the cornerstone of secure access to government services. It protects sensitive taxpayer data from unauthorized access while also being a practical prerequisite that users must fulfill before starting the online filing process.

There’s a simplified, one-page option for simpler tax scenarios.

The NBR recognizes that not all taxpayers have complex financial situations. This bifurcated approach to return forms reflects an understanding that a one-size-fits-all solution is inefficient. To address this, the e-Return system offers two distinct submission methods: a comprehensive "Detail Return" and a streamlined "Single Page Return." The Single Page Return (Form IT-GHA 2023) is a convenient option designed for individuals whose financial circumstances meet a specific set of criteria.

A taxpayer is eligible to use the simplified one-page return if they meet all of the following conditions:

• Taxable income is not more than BDT 500,000.

• Total assets are not more than BDT 5,000,000.

• The taxpayer does not own a motor car.

• The taxpayer does not own a house property or apartment in a city corporation area.

• The taxpayer does not have any assets outside of Bangladesh.

• The taxpayer is not a shareholder director of a company.

Note: While the official 2024-2025 NBR guide specifies a BDT 5 million asset ceiling, taxpayers may encounter older documentation or system screenshots showing a BDT 4 million limit. Always refer to the latest official return form and guidelines for the current assessment year.

For individuals with straightforward finances, this option removes much of the complexity and time associated with tax filing, making compliance significantly easier.

It's an entire digital ecosystem, not just one website.

The main NBR e-tax portal (etaxnbr.gov.bd) is much more than just a place to file your annual return. It serves as a central gateway to an entire ecosystem of interconnected digital tax services, reflecting the NBR's broader vision for a modern, digital-first tax administration system in Bangladesh.

From the main landing page, taxpayers can access several key services, each with a specific function:

• eTIN: Allows users to register as a taxpayer and obtain their Taxpayer Identification Number.

• eReturn: The core service for preparing and filing an online tax return.

• ReturnVerify/PSR: A tool to verify your return submission status and get your Proof of Submission of Return.

• eTaxPayment (eTDS): A system to manage and pay tax deducted at source.

• eTaxService: An online e-ticketing system that allows you to interact directly with the tax support team for assistance.

The portal also includes a function for an eReturnLedger, which the official user guideline transparently notes is "not available now." The inclusion of this future-state feature, along with the other active services, signals a clear long-term strategy to build a comprehensive and integrated digital platform for all tax-related activities.

A Final Thought

While navigating tax obligations can often feel daunting, the evolution of Bangladesh's tax system toward a digital-first model offers unprecedented levels of convenience, accuracy, and security. Advantages like faster processing times, automatic calculations that reduce human error, and secure data transmission are making it easier than ever for individuals to stay compliant.

The surprising truths about the e-Return system—from the mandatory nature of filing for accessing services to the existence of simplified forms—show that the platform is designed with the modern taxpayer in mind. With these digital tools making tax compliance more accessible than ever, what is the biggest barrier you still face in managing your financial responsibilities?