None -- no matter whether he or she is a citizen of a rich country or that of a poor one -- likes to pay tax because payment of tax would erode his or her income or profit. Yet the incidence of tax evasion in the developed countries is very low because of tough monitoring by the taxmen. But the opposite happens in most poor developing countries. And Bangladesh is no exception.
The taxpayers in the developed countries, however, do not grumble much because the state ensures certain benefits such as old age pension, free healthcare and free education for children for them. Moreover there are transparency and accountability in the spending of the taxpayers' money.
The taxpayers in Bangladesh do not know how and where their money is being spent. The government does present a budget in every June and that contains a lot of monetary figures. But the budget cannot be taken as a transparent document on spending of state resources.
The issues relevant to expenditure of the tax revenues and tangible direct benefits at individual levels for the taxpayers came up for discussion at a programme organised by the Sushasoner Jonny Procharavizan (SUPRO) in Dhaka city last Monday. At the programme, the SUPRO unveiled the contents of a survey it had carried out on 'Tax, Taxation System in Bangladesh and Analysis of Tax Differentials'.
About 63 per cent of the respondents covered by the SPURO survey, according to reports, said that the procedural complexities involving tax payment discouraged people to pay tax while 44 per cent said people did not pay tax because it causes financial losses to them. More than half of the respondents were of the view that the present 15 per cent value added tax (VAT) rate was high and it should be fixed at varying rates, taking into account the income inequalities of among various segments of the population.
The most interesting observation came reportedly from the district representatives of the SUPRO who were present at the Monday's programme. They said the people would not feel encouraged to pay tax unless the government would offer them the services that they need.
The survey in fact covered a small number of people, only 757, in six districts, namely, Barisal, Kushtia, Rangamati, Habiganj, Rajshahi and Shariatpur. And the respondents included poor and low-income people, who do not have taxable income.
The observation that procedural complexities are largely responsible for poor tax coverage, as the indications suggest, is partly true. There is no denying some complexities in tax payment are there. But, in most instances, those are man-made.
In recent times, the tax payment has been simplified to a large extent. If one is aware of the tax rates, slabs, taxable incomes and exemptions, one can easily submit one's tax return easily without any so-called expert's help. The National Board of Revenue (NBR) organised tax fairs in Dhaka and Chittagong in last two years to help people pay tax without hassles. But the results of the simplification of procedures, motivational campaign and attempts to lessen tax burden on individuals have not paid the dividend up to the expected level.
The NBR people may not agree, but the fact remains that many potential taxpayers are still out of tax net and a good number of existing large and medium taxpayers has been paying tax in compliance with the income tax laws. Moreover, the NBR has concentrated its focus primarily on Dhaka and Chittagong. But they need to keep in mind that the process of urbanisation has been going on at a faster pace during the last two to three decades than before.
A small rural bazaar by the side of a highway over the years has become an important trading centre. The tax men need to extend their reach to such places also, along with the move to cover the district headquarters adequately. But the NBR has unfortunately not been able to make much headway in this direction. They might be having problems with manpower and logistics. But there has to be a change in the situation. Â
In fact, hundreds of business establishments and owners of multi-storied residential buildings have been evading tax payments. Ensuring payment of tax by the evaders of all types remains a major challenge for the NBR. The target in this connection cannot be achieved through e-TIN (tax identification number) registration. The government will have to do something more. It should think of extending some visible benefits to the taxpayers.
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Taxpayers need to get some tangible benefits
Shamsul Huq Zahid | Published: April 02, 2014 00:00:00 | Updated: November 30, 2024 06:01:00
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