The government has approved the draft of Income Tax Act 2023 slashing the discretionary powers of tax officials and easing requirement of papers for businesses in submitting tax returns.

Once the law is passed, a mathematical formula in place of discretion will be used to calculate income taxes, Cabinet Secretary Md Mahbub Hossain said after the council of ministers headed by Prime Minister Sheikh Hasina cleared the draft on Monday.

“The calculation will be based on objective information given by a citizen, not subjective judgement of the official.”

The number of papers related to tax at source and required for returns submission has been reduced to 12 from 29.

The law is expected to reduce chances of “harassment”, the cabinet secretary said.

The existing law of 1922, which was changed to an ordinance in 1984, has at least 20 areas where an official has discretionary powers, according to him.

Such discretion led to numerous appeals by citizens that created complications, he said. The new law will also institutionalise the ICT-based income tax system.

The cabinet approved in principle a draft law to transform a2i, the access to information programme, into an agency to innovate.

Mahbub said the agency will support the growth of a culture of innovation in the ICT sector.