The National Board of Revenue (NBR) has formed a review committee for scrutinising draft of the new income tax law to assess its possible impact after implementation.
The newly-formed body would also conduct a study to align the draft income tax law ((English version) with the international best practices.
Finance Minister AMA Muhith, in his budget speech, for the current Fiscal Year (FY) 2018-2019 expected that the government would be able to place the new income tax law before parliament by the start of next financial year.
The seven-member review committee will analyse income tax laws of other countries to recommend on the basis of their best practices, officials said.
The review committee will be coordinated by NBR member (income tax information management and taxpayers' services) Md Alamgir Hossain. It will also devise strategies to help income tax wing implement the law successfully.
The committee will identify the possible threats and barriers for implementing the new law.
It would also scrutinise whether the new law has any conflict with the country's socio-economic context.
Existing provision of tax exemption would be reviewed to incorporate those in the new law.
The committee will have to submit a report after compiling the feedback of the field-level tax officers on the draft of the new law.
The review committee will submit its report to the income tax policy member Kanon Kumar Roy. It would also apprise of the updated draft after interval of a certain period of time.
Talking to the FE Monday, Kanon Kumar Roy said the committee would submit its recommendation on required amendment of the draft law and incorporation of new provision by end of this calendar year.
"We will adopt a go-slow policy for drafting the new law and implement it," he said.
He, however, declined to comment on possible date or year of implementation of the new law.
Earlier, the NBR planned to implement the new income tax law in July 2018. Later, it backtracked from its move considering it an election year.
The NBR also formed a supportive committee for assisting legislative expert of new income tax law in Bangla.
Mr Roy said the NBR will appoint an external legislative expert soon for scrutinising the draft law in Bangla.
Officials said the draft of the new income tax law will focus incorporation of a number of international provisions to combat tax evasion through cross border transaction.
Already, some of the provisions have been incorporated in the Income Tax Ordinance-1984 in the budget for FY 2018-19 to impose tax on digital businesses.
Foreign companies have to pay income tax (at source) at a rate of 20 per cent on their earning generated in Bangladesh despite not having permanent establishment in the country.
Through the provisions, banks will deduct the tax amount before making any payment to the international companies.
Income tax officials said a set of new international provisions including Controlled Foreign Corporation (CFC) is under review of the tax authority to be incorporated in the new income tax law.
Under the provision, Bangladeshi companies having businesses in the low tax regime will have to pay a part of tax as per country's corporate tax rates, officials said.
A CFC is a corporate entity that is registered and conducts business in a different country but controlled and managed by residents of another country.
Imposition of tax on merger and acquisition of companies, incorporation of thin capitalisation, General Anti Avoidance Rule (GAAR), Special Anti Avoidance Rule (SAR), Base Erosion and Profit Shifting (BEPS) are also under study of the drafting committee.
