Taxmen are now targeting the government officials with hefty salary packages for extracting a considerable amount of income tax from them to offset the revenue shortfall in the current fiscal year (FY), 2015-16.
Officials said the National Board of Revenue (NBR) has geared up its move to collect tax from the government officials following their recent pay hike.
The revenue board has recently urged all the government secretaries to pursue officials of their respective offices to pay due taxes to the public exchequer in line with the income tax law.
NBR Chairman Md Nojibur Rahman has sent Demy Official (DO) letters to all the secretaries, requesting them to instruct their relevant departments to deduct tax at source from salaries of the bureaucrats.
In Section 50 of Income Tax Ordinance 1984 there is a provision for deduction of tax at source. The officials have to pay income tax on their basic pay and two festival bonuses.
"In the new pay-scale, salary of the government officials increased substantially. With the hike, the volume of income tax at source will go up," the DO letter reads.
A government official will have to calculate his net payable income tax by deducting possible payment of at source tax and tax rebate. He will show the tax amount in his salary bill every month as at-source tax, it said.
The accounts officer concerned will give a certificate to the official on deduction of tax at source. The official will have to furnish the document to the income tax authority at the time of submission of his tax returns.
NBR expects some 150,000 new individual taxpayers from among the public servants with the recent pay hike of the government officials that came into effect from July 1, 2015.
All of the first-class government officials (grade 9 and above) and half of the second-class ones (grade 10 and below) came under the tax net with the implementation of the new pay-scale, officials said.
Currently, some 75,000 government officials have tax files and are paying income tax.
People having a monthly income of Tk 18,000 have to pay income tax. Tax-free threshold has been set at Tk 250,000 for individual taxpayers in the current FY. People having annual income above the limit will have to pay income tax.
NBR expects additional 65,000 taxpayers from first-class government officials, while 70,000 from second class.
According to the Ministry of Finance (MoF) data, there are some 139,617 government officials in first-class category (grade 9 and above). The government has some 142,763 officials under second-class status.
First-class officers' basic salary starts from Tk 22,000, while second-class ones' from Tk 16,000.
Public servants have been paying income tax on their basic salaries since 2010.
On September 6, the eighth pay-scale for public servants got cabinet consent. The new pay-scale for 2.1 million civil servants was made effective from the first day of the current FY.
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