IFC suggests widening of tax net

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Doulot Akter Mala
The two-member International Finance Corporation (IFC) team has suggested widening of the tax net, enhancing tax base and simplifying tax return format in order to encourage taxpayers to pay their taxes.
The government should make it easier for the tax payers to fill up the return forms, which will, in turn, help the country to improve its, doing business, indicator in the next WB report, the team suggested in a meeting with the National Board of Revenue (NBR).
IFC, the private sector arm of the World Bank (WB), held a meeting with the NBR chairman Monday to suggest some measures to improve doing business indicator in the WB report for 2009.
In the WB Group's report on doing business in 2008, Bangladesh has been ranked 107 among 178 economies covered in the report, down from the 102nd place of the previous year.
The team also suggested for reducing corporate tax rates along with widening of the tax base to increase the number of taxpayers, said Senior Programme Manager of IFC's Bangladesh Investment Climate Fund Syed Akhtar Mahmood.
The team on a three-day visit to the country, left Wednesday after conducting a series of meetings with different government departments including Regulatory Reform Commission (RRC), RAJUK and NBR.
Talking to the FE, NBR chairman Mohammad Abdul Mazid said: "We have already taken some measures to improve the tax payment system that the IFC is suggesting now."
The board has requested the IFC team to give a brief study on continuation of tax holiday and pre-shipment inspection system to help the government take proper decisions for the next fiscal, he said.
Talking to the FE, RRC Chairman Akbar Ali Khan said: "Some of the recommendations suggested by IFC team need further analysis in our country's context before being implemented."
The RCC will discuss those issues thoroughly in its next meeting, he said.
"The RRC will soon hold meetings with the Registrar of Joint Stock Companies and Firms (RJSC) to minimise the cost of starting a business. We will also find measures for inclusion of small companies," Akbar said.
The government will take extensive reform initiative with the proposals to improve doing business indicators in the next WB report, he added.
"Reduction of cost and time for land registration, simplification of tax payment system and customs clearance procedure are the three major issues discussed by the team in those meetings," Mahmood said.
"WB could provide fund support for appointing a local consultant to conduct a thorough study in this regard," he said.
"We have submitted the reform proposals to the RRC and they will further scrutinise the issues through conducting an in-house analysis," he added.
The government has already taken some steps to ensure taxpayer-friendly atmosphere, which will help to improve doing business indicator of the government, he said.
Already the government has carried out significant development in land registration procedures by monthly monitoring, Mahmood said adding that bottlenecks have to be identified to improve country's ranking.
Describing the roadblocks, he said construction of any establishment takes long time to get permission for utility connections.
A number of government wings are involved with the procedure, which could be provided in a 'one stop service', he said.
High-powered authority should be placed in those one stop services to take decision immediately, he said.
"Next 3-4 months will be critical for Bangladesh. Reform has be carried out by this time to improve the indicator," Mahmood added.