Poor response from taxpayers this fiscal

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Doulot Akter Mala
The National Board of Revenue (NBR) is receiving poor response from both the individual taxpayers and owners of legal yet undisclosed funds in filing returns this fiscal year (2008-09), said its officials.
Only 40,000 individual taxpayers filed their returns until September 11 paying income tax worth nearly Tk 3.6 billion.
Of the taxpayers, around 26,000 individuals submitted income tax returns paying Tk 1.85 billion to national exchequer under universal self-assessment method while 14,000 taxpayers submitted tax returns with a payment of Tk 1.80 billion under general method.
In the last fiscal, the NBR collected Tk 7.39 billion worth of income tax from 0.64 million individual taxpayers, which was only Tk 2.52 billion received from 0.53 million taxpayers in 2006-07.
Under the opportunity for declaring legal but undisclosed income, the NBR has received tax worth Tk 190 million against nearly Tk 1.0 billion undisclosed income declared by 950 persons.
Revenue officials said they expect to receive considerable number of tax returns in October. Recently, the NBR extended the individuals tax return filing time by one month up to October 30 following the poor response of the taxpayers.
In the current fiscal, the NBR has offered the opportunity to formalise legally earned undisclosed income with the payment of 7.0 per cent penal tax in addition to normal tax rate.
The caretaker government last year offered the opportunity of declaring undisclosed income with 5.0 per cent penal tax for four months from June through September.
The NBR had mopped up tax worth Tk 8.02 billion from the undisclosed income earners from the last offer where 42,459 people declared earnings worth Tk 52.13 billion.
NBR officials said the government's latest offer is quite different from that of the last year where undisclosed income was accepted without any 'question'.
An NBR order said undisclosed money holders will have to declare source of the income.
The taxpayer will also have to explain as to why he/she failed to declare his/her income in due time.
The NBR insiders said this year a number of big taxpayers are reluctant to pay tax. Those bigwigs have been taking advantage of the flexible and simplified tax laws.
Officials said lack of enforcement of law and too much flexibility on tax collection method has encouraged a number of bigwigs to evade taxes and hide their actual wealth information.
"This year, it will be a tough job for revenue board to achieve the target of income worth Tk 545 billion due to overall sluggish trend in tax payment," an official said.
The NBR should take some tough measures to force some of the big taxpayers to disclose their actual income, he said.
He said the tax department achieved a robust growth last year as fear factor works among them due to some measures like freezing bank accounts and jailing some of big tax dodgers first time in NBR's history.
This year, most of the tax returns have been submitted under universal self-assessment method where the auditing power of taxmen is limited.
In 2006-07, there were two systems---general and self-assessment---for filing tax returns by individual taxpayers.
In 2007-08, the government introduced a new measure 'universal self-assessment' under which tax officials will not able to apply discretionary power without permission of the board.
A senior tax official, preferring anonymity, said there is large scale evasion under the universal self-assessment method, but law bars the taxmen from scrutiny their tax files.
In 2007-08, returns with tax worth Tk 1.92 billion were submitted by self-assesses while Tk 3.74 billion by general returns and Tk 1.71 billion by universal self-assesses.
In the current fiscal, income tax collection target has been set at Tk 130.54 billion, which is 24 per cent of total revenue target.
In July-August period, the income tax department collected only Tk 11.30 billion registering 1.70 per cent growth over that of the previous year's collection. The income tax collection growth was 52.29 per cent in the same period of last fiscal, which was largely contributed by drive against undisclosed income.