Imposition of taxes on assets is necessary to ensure progressive taxation and equity so that the well-off section of people pays more taxes than others, an economist said while taking part in a seminar Saturday.
"In Bangladesh, capital gain or wealth accumulation is virtually tax-free. People having assets are not paying tax as they are politically and professionally influential," said Dr Ahsan H Mansur, Executive Director of the Policy Research Institute (PRI).
Addressing at a national seminar on "Unveiling tax, tackling poverty: Some policy considerations," Dr Mansur proposed imposition of tax assessing actual and present value of property of an individual taxpayer.
ActionAid Bangladesh organised the seminar as a part of its 'Tax power campaign 2014-2017' at the city's CIRDAP auditorium.
Former adviser to the caretaker government M Hafizuddin Khan chaired the programme while ActionAid Bangladesh Country Director Farah Kabir moderated the session.
Mr Ahsan H Mansur said currently asset is not taxable which is not right in economic as well as taxation context.
Initiatives should be taken to impose taxes on property to make assets productive, he added.
Taxmen should intensify their efforts to plug big loopholes rather than adopting an easy way only increasing tax rates to collect more revenue, Dr Mansur said.
"Individuals are getting wealthy with the purchase of assets and keeping them idle for years," he added.
Transparency International Bangladesh (TIB) Executive Director Dr Iftekharuzzaman said the tax authority should work for increasing direct tax collection.
Currently, direct tax is only 30 per cent of the aggregate tax collection.
"Tax burden is higher on common people now. Tax should be imposed on the basis of income," he said.
He criticised the black money whitening scheme of the government, terming the facility 'unconstitutional'.
Of the beneficiaries of the scheme, some 75 per cent are high income people, he added.
Citing media reports, he also pointed out alleged tax evasion by cell phone companies and cigarette companies and abuse of duty-free cars by policy makers.
He underscored the need for awareness among the people and transparency in collection and expenditure of taxes to ensure 'tax justice'.
Dr Iftekhar alleged large taxpayers were evading taxes to the extent of Tk 200 billion to Tk 250 billion in a year.
Some 137 big companies under the Large Taxpayers Unit (LTU) are allegedly evading VAT and duties to the tune of nearly Tk 100 to Tk 120 billion.
He said the global financial market has scope to absorb the siphoned-off money.
Switzerland, the United States, the United Kingdom, Luxemberg, Singapore, Hong Kong and our neighbouring India are the most attractive destinations of stolen money, he said.
Demand for stolen money through capital flight should be checked through international linkage addressing the demand side, Dr Iftekharuzzaman said.
He said accumulation of stolen money is higher in Switzerland to the extent of 5.0 per cent and 2.0 per cent in India.
Dr Iftekharuzzaman said some $30 trillions of siphoned- off money flows into the financial markets of developed countries.
"From 2001-2010, around US$6.0 trillion was siphoned off from developing countries to the markets of developed countries," he said.
Asgar Ali Sabri, director of programme, policy and campaigns, ActionAid Bangladesh, presented a keynote paper in the programme seeking some policy considerations.
The recommendations include reclaiming revenue from multinational companies and big national corporate entities, redistribution of tax revenue to education and health sector in an efficient and gender responsive way.
The ActionAid also sought rigorous review of tax incentives and a concrete policy reform initiative, development of tax index of Bangladesh, ensuring transparency in tax regime, enhancing capacity of the NBR, ensuring participation of civil society on tax policy formulation etc.
ActionAid country director Farah Kabir said the country could meet its need for foreign aid by combating tax evasion.
In the concluding remarks, Mr M Hafizuddin laid emphasis on ensuring equity and transparency in expenditure of tax money.
Experts from civil societies, different development and non-profit research organisations including the Center for Policy Dialogue (CPD), SUPRO, among others, also spoke in the seminar.
