The much-talked-about Income-tax Ordinance Amendment Bill 2023 was passed in parliament on Sunday with some changes prescribed by the Parliamentary Standing Committee on the Ministry of Finance.
Opposition lawmakers presented 80 amendment proposals to the Bill, which was placed in the House on June 8, 2023. The parliamentary standing committee submitted its report on the Bill on Thursday last week.
The committee has put forward a set of recommendations, which includes exempting bank depositors with up to Tk 1.0 million deposits (credit balance) from the mandatory submission of tax returns.
However, instead, the committee has proposed making return submission mandatory for bank depositors who have term or fixed deposits of the same amount.
According to official sources, many banks are requesting depositors to provide proof of tax return submission, regardless of their deposited amount, even though there is a specified ceiling for this requirement.
The committee, led by Abul Hassan Mahmood Ali, has also suggested considering one-third of the income of salaried individuals or Tk 450,000, whichever is lower, as taxable income.
These changes have been recommended after the parliamentary committee found that individuals with a monthly income of Tk 66,000 may be exempt from taxes.
Under the proposed recommendation, companies, firms, associations of persons and funds with a turnover of up to Tk 30 million will be required to submit audited financial statements. The turnover threshold was Tk 20 million in the proposed budget.
The committee has clarified any confusion regarding tax rebates for savings certificates and debentures by introducing two words in the government securities.
Besides, the committee has proposed the elimination of provisions mandating the submission of wealth statements during overseas travel. It also suggests increasing the special tax amount for undisclosed income in apartments.
The parliamentary standing committee on finance also recommends removing a provision under section 167 of the bill that requires individuals to submit a tax return after travelling abroad for personal purposes.
Moreover, the committee recommends raising the special tax rate for investments in 200-square-meter flats or buildings in Gulshan Banani, Baridhara, Motijheel and Dilkusha commercial areas to Tk 6000 per square meter from the previous Tk 5,000.
While addressing the House regarding their proposals, several opposition lawmakers said that the Treasury wanted to pass the bill hastily. They requested the government to subject the Bill to further scrutiny, but the proposals were rejected by the House in voice votes.
JP lawmaker Kazi Feroz Rashid told the House that corruption rules the roost in NBR, where files do not move without bribes. He questioned why the revenue board had failed to automate the revenue mobilisation process, which could significantly increase revenue.
"Only Tk 10,000 crore is needed for automation, but unfortunately we have seen that despite the passage of a long period the automation did not take place" he said.
"If the Securities and Exchange Commission can carry out the automation process, why does a big institution like the NBR has failed to do so?" he asked.
Lawmaker Fakhrul Imam said the provision in the income tax amendment bill, which aims to realise a 0.6 per cent tax on foreign donations, will create a hindrance in the influx of foreign assistance and donations.
"The donors will not be encouraged by this step, rather a huge amount of funds will be diverted to other countries where there is no such hindrance," he said.
He mentioned that the country receives around US$1 billion in foreign donations, and by imposing a 0.6 per cent tax on this amount, the government can realise around Tk 42 crore. However, at the same time, it is taking the risk of losing the billion-dollar fund.
JP lawmaker Shamim Haider Patwari said that the bill includes provisions that will enhance the discretionary power of the NBR, which is undesirable.
He also pointed out that the definition of 'Company' in the Bill includes almost every entity, resulting in more harassment for taxpayers. He further noted that there are provisions for realising taxes on people's wealth abroad, but since the government has no information on such amassed wealth, how can it collect taxes from these assets?
JP lawmaker Rawshan Ara Mannan Arafat said that the NBR, being the enforcer of the income tax rules, should not be given the authority to formulate the ordinance.
In response to the criticisms, Finance Minister AHM Mustafa Kamal said that there are scopes for addressing the gaps in the bill through future amendments.
He said the automation process has started at the NBR and expects to see positive results by the end of the year.
Speaker Shirin Sharmin Chowdhury presided over the House, where the leader of the House, Prime Minister Sheikh Hasina, was also present.
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