New Delhi, Jan 19 (NationPress) Corporate taxpayers in Bangladesh are currently navigating a landscape of significant uncertainty, as there is no definitive moment at which tax obligations can be considered final. This is due to the incessant audits of the same compliant taxpayers, a practice that is not only inefficient but also erodes trust and discourages the move towards formalisation, as highlighted by Masud Khan, Chairman of Unilever Consumer Care Ltd.

According to Khan, the tax regime in Bangladesh frequently subjects compliant taxpayers to arbitrary assessments. Sales figures, even when backed by statutory audit reports, are often dismissed without reasonable justification. Furthermore, substantial portions of regular business expenses are rejected on vague grounds of “lack of documentation”, despite the existence of documentation that adheres to established accounting and auditing standards.

This leads to a predictable increase in appeals. Taxpayers, who are confident in the accuracy of their audited accounts, find themselves needing to seek resolution at higher appellate levels. This not only consumes valuable time and resources for both the businesses and the tax administration but also diverts focus away from genuinely high-risk cases.

Even after an assessment is concluded, many cases are still selected for audits by teams of tax officials from different circles within the same tax zone. This situation is exacerbated by the involvement of two additional divisions under the National Board of Revenue: the Department of Inspection and the Central Intelligence Cell. Both units conduct independent audits of returns that have already undergone assessments and re-audits, leading to new interpretations, objections, and further tax demands.

At the heart of this issue lies a deeper structural flaw: a deficiency in accounting and financial analysis capabilities within the tax administration. Many disputes arise not from willful non-compliance but from a lack of understanding of contemporary accounting principles, industry-specific cost structures, and the line between aggressive tax planning and legitimate business transactions.

Khan emphasizes that enhancing accounting proficiency within tax offices would lead to improved quality in initial assessments. Properly trained officials would be more adept at identifying genuinely fraudulent financial statements early, thereby sparing compliant taxpayers from prolonged scrutiny. This competence would also serve as a natural deterrent against fraudulent reporting.

Equally critical is the strategic application of artificial intelligence and data analytics. AI tools can process vast datasets, benchmark financial ratios across different industries, pinpoint anomalies, and prioritize high-risk cases with far greater accuracy than manual methods. This would mitigate subjectivity, limit the harassment of compliant taxpayers, and enhance revenue outcomes.

To expand the tax base and boost voluntary compliance, Bangladesh must replace outdated audit practices with competence, consistency, and closure. This is the foundation of a credible and modern tax system.