The taxmen have detected, of late, an increased propensity among a section of taxpayers, both institutional and individual, to show their previous undeclared income as income from 'fish farms' in their tax returns and evade substantial volume of tax.
These taxpayers have taken advantage of the provision of voluntary declaration of undisclosed income and the lower rate of tax on income from fish farms, which was effective until September last.
Income tax officials in the field offices said they have found several tax returns in the current fiscal year (FY) 2014-15 with declaration of a considerable amount of income, earned in the previous years as fish farm income to enjoy the reduced rate.
Until FY 2013-14, owners of fish farms were enjoying a reduced rate of tax at 3.0 per cent.
However, the National Board of Revenue (NBR) withdrew the reduced tax rates last September after it found many taxpayers intentionally showing their other incomes from fish farms.
Owners now have to pay 35 per cent corporate tax income from fish farms in case of a company.
For fish farms in individuals' name, the owners have to pay 10 per cent to maximum 30 per cent tax on their income from the farms.
Now, taxpayers can enjoy lower tax rate by showing undisclosed income from fish farms than any income from other sources.
Taxmen recently found many of the taxpayers coming to formalise a large volume of income showing those from fish farms availing the provision of 'voluntary declaration of undisclosed income'.
Following the trend, some tax have officials expressed their concern over the issue as they can neither ask any question nor can they reject the claim as per tax law.
Talking to the FE, a senior tax commissioner said the taxmen have found the recent trends that might cause loss of significant amount of revenue to the public exchequer.
"We are unable to take any steps as the income tax law bars taxmen from auditing the shown income declared under the said provision," he said.
The Section 19E, framed for voluntary disclosure of undisclosed income in FY 2012-13, allows taxpayers to show their undisclosed money with 10 per cent tax in addition to normal tax rate. Taxmen would not ask any question on the income shown thereof.
"Many taxpayers are showing undisclosed income in the current FY under the head of fish farms to avoid high rate of taxes from other incomes," he said.
There was no such income in their tax files in the previous years that the taxpayers showed as undisclosed in the current FY, he added.
As the reduced tax rate has been withdrawn in the current FY, some taxpayers are hurriedly availing the lower tax rates of previous years under the provision, he said. Â
The official said normal rate of taxes is relatively high on other incomes which they intentionally are avoiding by showing undisclosed income from fish farms.
Corporate tax rate for listed companies is 27.5 per cent while 35 per cent for non-listed ones. Also, individual tax rate starts from 10 per cent for those having annual income above Tk 2,20,000. Â
The official said the public exchequer is being deprived of the revenue in this way which should be checked by amending the tax measures.
He suggested possible ways to check the practice by imposition of a bar on declaration of fish farm income under the provision 19E or incorporate provisions so that taxmen can audit the particular income.
The taxmen alleged that many of the fish farm owners disappeared earlier after enjoying the reduced tax rates as there was no existence of such farms. It is clear that they showed false income from fish farms that they had earned from other businesses.
A senior income tax official said they are actively considering the issuance of a general order to the field-level tax offices for not accepting undisclosed income from fish farms.
He said such irregularities should be checked immediately to thwart evasion of taxes and ensure justice to genuine taxpayers.
doulot_akter@yahoo.com
Evaders gain from lower tax on ‘fish farm’ income
Doulot Akter Mala | Published: December 20, 2014 00:00:00 | Updated: November 30, 2024 06:01:00
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