The government has taken the initiative to make Taxpayer Identification Number (TIN) mandatory for opening and operating bank accounts in order to expand the tax net and increase transparency in financial transactions.
Having a TIN may be made mandatory not only for opening new accounts, but also for keeping existing bank accounts active.
Sources concerned at the National Board of Revenue (NBR) said that the issue of exempting students, government pensioners and individuals and organizations exempted from tax through the gazette is under consideration.
Finance Minister Amir Khasru Mahmud Chowdhury may present a proposal in this regard in the upcoming budget for FY27.
Currently, a large number of bank account holders in the country do not have TIN.
Although tax is deducted at source at a relatively high rate on interest on bank deposits without TIN, TIN was not mandatory for opening bank accounts until now.
Tax administration officials believe that linking TIN with bank accounts will increase monitoring of financial transactions and reduce the scope for tax evasion. At the same time, it will be easier to increase the number of taxpayers.
To this end, the NBR has taken the initiative to be directly integrated with the banking sector database.
In addition, there are plans to establish online connections with the databases of various government and private organizations, including National Identity Cards (NID), utility service providers, sub-registry offices.
The NBR is also considering several other steps to expand the tax net.
These include making TIN mandatory for registering motorcycles with a capacity of 150 cc or more, introducing Withholding Registration Number (WIN) for institutions deducting tax at source, and imposing a 0.20% tax on retailers.
However, a section of bankers and tax experts have expressed concerns about this initiative.
Syed Mahbubur Rahman, managing director of Mutual Trust Bank PLC, said that in the past, after making TIN mandatory for credit cards, the number of customers decreased. If a similar obligation is imposed for bank accounts, transactions in the banking channel may decrease. According to him, imposing new obligations without removing the distrust and anxiety that people have about the banking sector may not bring the desired results.
Currently, there are about 170 million bank accounts in the country. However, it is difficult to determine the actual number of account holders as an individual or organization has multiple accounts.
According to tax expert and managing director of SMAC Advisory Limited, Snehasish Barua, making e-TIN mandatory in a cash-based economy may hinder the progress of financial inclusion.
This may lead to small entrepreneurs moving out of the formal banking system, increasing dependence on cash transactions and negatively affecting bank deposit growth and liquidity.
He said that instead of imposing strict obligations, the government should focus on gradually expanding the cashless transaction system, creating opportunities for displaying bank account information digitally in tax returns, and strengthening coordination between the tax and banking systems.
According to Snehashish Barua, if the national wealth database is fully integrated with the tax return system, it will be easier to prevent tax evasion and expand the scope of taxpayers.