NBR under pressure for time extension

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Shakhawat Hossain
The National Board of Revenue (NBR) is in a dilemma whether or not to pay heed to hundreds of appeals for extension of time for declaring undisclosed income by paying normal rate of tax, in addition to five per cent penalty charges.
The period of two months, offered to the taxpayers, will expire July 31.
"We are under tremendous pressure from the business community and the individual taxpayers for extension of the ongoing facility," said NBR Member Ali Ahmed.
But the revenue board is yet to take a decision regarding the extension of time under the facility, he added.
On June 4, the NBR offered an opportunity to the taxpayers to disclose their undisclosed income during the period between June 05 and July 31, 2007.
Although the response was poor at the beginning, it is now growing with one more week to go.
According to the sources, some NBR insiders also prefer extension of the time due to the encouraging response from the taxpayers and for reasons of assessment.
The income tax commissioners, engaged at the field level, and policy makers at the central office have already urged the NBR chairman to consider the appeals for the extension of time.
"But the chairman has not given any concrete decision on the issue," one source said.
NBR Member Ali Ahmed has informed the FE that the response from the undisclosed money holders is growing with the approaching deadline.
As of Monday last, some 650 people availed of the opportunity that helped an injection of Tk 1.71 billion into the formal economy. The NBR has received Tk 340.2 million in income tax from the disclosures.
According to the member, the revenue board is not at all happy with the amount of money that has been disclosed so far.
"We know the amount of such undisclosed money will be much higher in the coming days," he said.
The government earlier provided such opportunities with a hope of bringing in large amount of undisclosed money in the formal economy.
At least on six previous occasions, covering nine years, the facility was offered with various attractive proposals and under more liberal conditions. The rate of tax on such undisclosed income was also much lower on such occasions than that of the present one
A total of Tk 51.95 billion was brought into the formal economy during the period.
The biggest amount of undisclosed money worth 17.75 billion was legalised in fiscal 2002-03.
Some Tk 10.00 billion was disclosed in fiscal 2000-01 when the opportunity was reintroduced after a gap of one decade.
More than Tk 15.00 billion of undisclosed money was declared in 2004-05 fiscal, which was the last opportunity for such disclosures before the NBR announced the current facility with a much higher rate of tax plus penalty of five per cent.