TIN may no longer be mandatory for opening bank accounts

The government is likely to backtrack on its proposal to make a Taxpayer Identification Number (TIN) mandatory for opening bank accounts in the upcoming 2026-27 fiscal year. As a result, the requirement may be excluded from the final budget.

The proposal sparked widespread debate following the budget announcement. A TIN carries an obligation to file income tax returns, meaning many people with no taxable income would still have been required to submit returns. Concerned that the measure could have a negative impact on the banking sector, the government is now preparing for a potential U-turn to avoid these risks.

However, the final decision will be made after the Prime Minister returns from his visit to China, according to officials of the National Board of Revenue (NBR).

Sources at the NBR said that the government has identified several budget proposals for possible revision following the budget announcement, with the TIN requirement for bank accounts being a primary concern.

Speaking to Prothom Alo on condition of anonymity, an NBR official said the government does not want to create any panic or risk considering the current state of the banking sector. For that reason, the TIN requirement has been placed on the list for reconsideration. However, the prime minister will make the final decision.

The measure had been one of the major proposals in the announced budget. According to the original budget proposal, individuals would have been required to provide a TIN certificate to open a bank account. However, certain exemptions were included. Students, for example, would not have been required to provide a TIN when opening an account. The requirement would also not have applied to “frills accounts,” such as Tk 10 bank accounts, accounts for receiving government allowances and those held by pensioners.

Meanwhile, bankers believe the social and economic conditions are not yet suitable for requiring everyone to obtain a TIN. They therefore consider the withdrawal of the proposal to be the right decision.

Asked about the issue, Mohammad Ali, Managing Director and CEO of Pubali Bank, told Prothom Alo, “Many people do not have a TIN. Obtaining one is also a technical process. Society is not yet fully prepared for it. The announcement created fear among people. If implemented, many might have avoided opening bank accounts and shifted to cooperatives or other alternatives.”

However, he added that such a requirement might become necessary in the future.

According to Bangladesh Bank statistics, there are currently 193,251,232 bank accounts in the country. Of these, 177,950,465 are savings accounts and 15,300,767 are loan accounts.

The announcement that new account holders would be required to provide a TIN certificate had triggered concerns across the banking sector. The government initially took the initiative to broaden the tax net. However, considering its potential negative impact, the Ministry of Finance is now seeking to move away from the proposal.

Economists believe that expanding tax collection from the informal sector is more important than making TIN submission mandatory.

MA Razzaque, chairman of Research and Policy Integration for Development (RAPID), said, “There was concern that transactions could shift from the banking sector to the informal economy. That may be why the government is reconsidering its decision. Bangladesh has a large informal sector and bringing those activities under the VAT and tax net is the bigger challenge. Otherwise, many businesses may continue conducting large-scale transactions without opening bank accounts at all.”

Revenue officials are also hinting at changes to the duty structure for cashew nut imports in the final budget. The adjustment is aimed at supporting local processing industries.

Under the proposed budget, a 15 per cent customs duty and a 15 per cent VAT were imposed on the import of raw cashews (in-shell). This spiked the total tax rate on raw materials from 13.58 per cent to a staggering 40 per cent.

Entrepreneurs opposed the move, arguing that domestic production remains insufficient to meet demand. Instead of raising the import duty on raw materials, they demanded a 20 per cent supplementary duty on processed (shelled) cashews imported from abroad. The NBR is now indicating that the final budget will reduce the duty on raw cashew imports while increasing the duty on processed cashews.

Additionally, the budget had proposed a six-fold tax increase for advertising agencies. Currently, the source tax in this sector is the higher of 0.65 per cent of the total bill or 10 per cent of the commission and fees received. Under the proposed budget, a 4 per cent withholding tax on the total bill was introduced for payments made to print and electronic media agencies. NBR sources suggest that this rate may also be reduced in the final budget.