Corporate taxpayers in Bangladesh are experiencing uncertainty as audits are repeatedly conducted on compliant taxpayers, leading to inefficiency and a lack of trust, as noted by Unilever Consumer Care Ltd Chairman, Masud Khan. The tax system’s arbitrary nature in Bangladesh often sees rejection of sales figures and disallowance of business expenditures without credible justification, causing a surge in appeals. This process not only consumes time and resources but also diverts attention from high-risk cases, Khan highlights.
At the core of the issue lies a structural weakness in accounting and financial analysis capacity within the tax administration, leading to disputes arising from limited understanding rather than deliberate non-compliance. Khan suggests that enhancing accounting competence within tax offices could improve initial assessments and act as a deterrent against fraudulent reporting. Additionally, the strategic use of artificial intelligence and data analytics is recommended to prioritize high-risk cases accurately and improve revenue outcomes.
To enhance the tax system in Bangladesh and promote voluntary compliance, the article emphasizes the need to replace regressive audit practices with competence, consistency, and closure. This shift is crucial for establishing a credible and modern tax regime in the country.
