Speakers at a programme on Tuesday said the government should put more emphasis on collection of direct tax to reduce burden of indirect tax on the people, especially middle and low income ones.
They also called for bringing transparency to tax system and reducing discrimination between the rich and the poor in taxation to encourage the people to pay taxes.
The speakers made the call at 'Citizens' Tax Tribunal-2018' organised by ActionAid Bangladesh at Nabab Nawab Ali Chowdhury Senate Bhaban at Dhaka University (DU).
Moderated by ActionAid Bangladesh country director Farah Kabir, DU professor M M Akash and parliamentarian Fazle Hossain Badsha addressed the programme as jurists while DU professor Dr Kazi Maruful Islam, Coalition for Urban Poor executive director Rebbecca Sun-Yat and Samajtantrik Sramik Front general secretary Razekuzzaman Ratan attended the session as amicus curiae.
The objective of the event was to bring attention of the government and other stakeholders to the progressive tax system that reduces burden on the poor.
Mr Akash said the country has made progress in many indicators - notable reduction in foreign aid dependency, continuous economic growth over 6.5 per cent (7.5 per cent as per government's estimation) while social indicators have been very impressive.
Then why people still don't want to pay taxes, he asked saying, "Poor people are facing discrimination as the country's growth hasn't been inclusive."
Conversely, businesspeople aren't happy either; for instance, they suffer for getting electricity connection in their factories, he said. "So, they are reluctant to pay taxes."
The government should lay emphasis on value added tax (VAT), which is applicable to all, to meet the revenue target but the businesses, showing many excuses, have been delaying its full implementation, he said.
Mentioning that there are around 0.85 million registered businesses eligible to pay VAT, Mr Akash said it is very interesting that only 32,000 of them pay VAT.
People are paying VAT on their day-to-day product and utility consumption, but there is no guarantee that traders are submitting it to the tax authority.
He said, "Direct taxpayers know how much tax they are paying but indirect taxpayers have no method to calculate the amount of tax they paid."
So, indirect tax system should be transparent and the revenue authority should inform the taxpayers about the sector and district-wise VAT collection, the economist added.
Speaking at the programme, Mr Badsha said current VAT system is discriminatory and has put burden on low income people like garment workers, slum dwellers, day labourers and students.
Tax burden fell on general people due to money laundering by rich people and tax evasion by businesses and corporate organisations, said Badsha, also general secretary of Workers Party of Bangladesh.
He said, "There is no resemblance between the constitution and the national budget because the lawmakers don't think about the poor rather their decisions reflect the demands of big corporations and wealthy people."
Emphasising on creating awareness among the people about VAT and tax, Mr Badsha said united efforts are needed for a logical, ethical and impartial tax system.
Mr Maruful Islam said coverage of direct tax should be widened to reduce indirect tax burden on the poor.
People are paying taxes but they aren't getting satisfied with the return from it, he said adding, "What is happening to that money? Businesses are getting benefit; they are evading taxes and siphoning the money abroad."
Fatema Sultana, a garment worker, said garment owners get 4.0 per cent subsidy on their export while they also get many financial benefits from the government and banks.
"Our wage is very small in size; we pay taxes (VAT) like other persons in the country, but the workers need to take to the streets for a little increase in their wage," she said.
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