The National Board of Revenue (NBR) has decided to establish five special tax zones to oversee collection of tax at source in a bid to check revenue leakage from the potential sector that contributes 57 per cent of the total income tax collection.
The organisation, in a recent board meeting, took the decision of launching separate tax zones across the country for monitoring collection of source tax, also known as tax deducted at source (TDS).
NBR will send a letter to the Ministry of Public Administration, seeking permission for expansion of its tax zones. Currently, there are 31 income tax zones across the country, said a senior official.
The revenue board took the decision of expanding its tax zones after taxmen found it difficult to monitor some 59,000 authorities assigned for deduction of tax at source, he added.
NBR collected Tk 254.49 billion income tax as withholding tax in the fiscal year 2014-15, more than half of the aggregate income tax collection of Tk 493.93 billion.
The NBR official said TDS collection can be increased manifold through proper monitoring. But organogram of the income tax administration lacks any monitoring authority to scrutinise source tax collection. There is no dedicated tax zone for supervising TDS collection.
NBR has recently formed a 15-member committee to plan formation of the new five special tax zones for monitoring collection of tax at source, he added.
"It is difficult for the taxmen at territorial tax zones to monitor TDS collection properly. They cannot audit the 59,000 authorities concerned intensively."
Earlier, the revenue board pointed out four key loopholes in collection and deposit of TDS by the government and private organisations. These are - deduction of tax at lower rates, evasion of tax through not depositing to the public exchequer on time, avoiding deduction of tax at source, and avoiding depositing the deducted tax.
Commercial banks, companies, employers, suppliers and development projects implementing agencies of the government deduct TDS from different service-seekers and deposit it to the public exchequer.
The 59 authorities are assigned to deduct source tax from interest amount on bank deposits, savings certificates, salaries, interest on securities, bank deposits, supply of goods and execution of contracts, fees for services, commissions in different sectors, payment on local LCs, and dividends etc.
© 2024 - All Rights with The Financial Express
