New Delhi, Jan 19 (IANS) Corporate taxpayers in Bangladesh are facing deep uncertainty with no clear point at which tax liabilities can be regarded as final as repeated audits are carried out of the same compliant taxpayers which is not only inefficient but undermines trust and discourages formalisation, according to Unilever Consumer Care Ltd Chairman, Masud Khan.

A tax system that repeatedly audits the same compliant taxpayers is not only inefficient; it undermines trust and discourages formalisation, he observes.

He points out in an article in The Daily Star that tax assessments in Bangladesh are often arbitrary. Sales figures supported by statutory audit reports are frequently rejected without credible justification, while large portions of routine business expenditure are disallowed on vague grounds of “lack of documentation”, even when such documentation meets established accounting and audit standards.

The predictable outcome is a surge in appeals. Taxpayers, confident in the integrity of their audited accounts, have little choice but to seek redress at higher appellate levels. This process consumes valuable time and resources for both businesses and tax administration, diverting attention from genuinely high-risk cases, Khan writes.

Yet, even completion of an assessment does not bring closure. A significant number of cases are later selected for audit by teams of tax officials from other circles within the same tax zone.

The process becomes even more regressive with the involvement of two other wings under the National Board of Revenue: the Department of Inspection and the Central Intelligence Cell. Both conduct independent audits of returns that have already been assessed and re-audited. Each stage introduces new interpretations, new objections and fresh exposure to additional tax demands.

At the core of this problem lies a deeper structural weakness: inadequate accounting and financial analysis capacity within tax administration. Many disputes do not come from deliberate non-compliance, but from limited understanding of modern accounting principles, industry-specific cost structures and the distinction between aggressive tax planning and legitimate commercial transactions, the article states.

He has pointed out that strengthening accounting competence within tax offices would improve the quality of initial assessments. Properly trained officials would be better equipped to identify genuinely spurious financial statements early, while compliant taxpayers would be spared years of repetitive scrutiny. Such competence would also act as a natural deterrent against fraudulent reporting.

Equally important is the strategic use of artificial intelligence and data analytics. AI-driven tools can analyse large datasets, benchmark financial ratios across industries, identify anomalies and prioritise high-risk cases with greater accuracy than manual selection. This would reduce subjectivity, limit harassment of compliant taxpayers and improve revenue outcomes, the article states.

If Bangladesh is to broaden the tax base and improve voluntary compliance, it must replace regressive audit practices with competence, consistency and closure. That is the cornerstone of a credible and modern tax regime, the article added.

–IANS

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