Move to bring all NGOs under tax net

Doulot Akter Mala | Published: December 19, 2015 00:00:00 | Updated: February 01, 2018 00:00:00

Government's revenue authority has moved to bring onto tax net all non-government organisations (NGO) across the board, be they registered or not registered with the NGO bureau, officials said.
They fall in the way during the current hunt for potential sectors and new avenues for tax collection, against the backdrop of recent revenue-target failure.
Under the existing income-tax rules, only operating incomes of NGO bureau-registered organisations are entitled to enjoy income-tax exemption.
The sources said non-operating incomes of NGOs are taxable but many of the NGOs are in confusion over the issue and not paying tax on non-operating incomes, too.
In a recent board meeting, the income tax wing of the National Board of Revenue (NBR) decided to collect list of the NGOs registered with the NGO Affairs Bureau.
Taxmen will also search out the non-registered NGOs to impose taxes on them.
Talking to the FE, field-level officials said tax collection from NGOs is one of the poor receipts compared to other organisations.
There are some 500 NGOs holding taxpayer-identification number (TIN). The NBR collects less than Tk 100 million in income tax from the organizations, they said. Â
A senior tax official in one of the field offices said incomes related micro-credit operations of the NGOs are tax-free but other incomes are not.
"If the organisations deposit money with banks or have Fixed Deposit Receipt (FDR), the income from interest is taxable," he added.
There have been longstanding disputes between the NGOs and the taxmen over imposition of taxes on non-operating incomes of the organisations.
Allegations are rife that there are many unregistered NGOs across the country but they have evaded tax payment over the years. NGOs have to pay tax on non-operating income at individual taxpayers' rate, ranging from 10 per cent to 35 per cent.
Talking to the FE, NGO Bureau Director Dr Md Helal Uddin said until December 8, 2015, there are 2,447 NGOs registered with the bureau.
"It is not necessary that all NGOs have to be enlisted with the bureau. NGOs have to apply to the bureau for registration after getting foreign donation," he said.
There is a process of getting listed with the bureau.
"It sends the application of an NGO to the Ministry of Home for investigation prior to giving it registration," he said.
Officials said the Tax Zone-5 collects revenue from NGOs, real-estate sector, and commissions from advertising agencies.
The zone had collected Tk 1.74 billion in income tax until October, achieving its target.
It collected a significant amount of revenue through audit of source-tax collection from the ad firms.
The NBR has intensified its drive to augment income-tax collection as it had registered a slow growth by about 10 per cent until November.
The government has set the highest target for income tax this year. The target is Tk 659 billion for this fiscal year 2015-16 out of the total revenue target of Tk 1.76 trillion. Officials said the income-tax receipts will increase in December with the collection of corporate tax.
Â Â Â doulot_akter@yahoo.com