NBR moves to recoup revenue losses due to raise in income-tax exemption limit

FE Team | Published: June 21, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

S M Jahangir
The National Board of Revenue (NBR) is taking steps to recoup the possible revenue losses that might be caused due to the proposed enhancement of income-tax exemption limit.
The government has proposed to raise the tax-exempted income limit for individual taxpayers to Tk 150,000 in the national budget for the fiscal year (FY) 2007-08 from existing Tk 120,000.
The proposed enhancement could cause dropouts of a significant number of taxpayers, official sources said.
An official estimate suggested that the NBR would suffer a revenue loss to the tune of around Tk 500 million in the FY 2007-08 following the increase in the tax-exemption of income limit.
Under the measures, the authorities are actively considering bringing in additional people under the tax net, an official told the FE.
Besides, extra efforts will also be made to realise additional income tax from the existing taxpayers, the official noted.
According to the source, a process is underway to simplify the tax payment process, aiming to lure new taxpayer.
"We have already initiated a move to simplify the existing income-tax return form in order to make the revenue payment system more compliance-friendly for taxpayers," the official said.
The government's current move to curtail the discretionary power of the tax officials and introduction of the 'Universal Self-Assessment Procedures' will also help encourage taxpayers to pay tax voluntarily.
Collections of income tax have been affected due to the general aversion of taxpayers as well as procedural complexities in paying taxes, officials said.
Referring to the official figures, around 1.0 million people submit income tax returns while the actual number of taxpayers is lower than that.
Terming the number of taxpayers 'far below the expected level', an official said there remains enormous scope for increasing the number.
The official further said the total number of tax-payers' identification number (TIN) holders has reached 2.1 million.
Citing the existing mismatch between the numbers of TIN holders and taxpayers, officials admitted that a large number of TIN holders are either 'irregular' or 'fakes'.
Against this backdrop, the authority has already initiated a process to delete the false TINs from the system after verifying their genuinity.
Meanwhile, the government has set the target of collecting income tax at Tk 103.38 billion for the FY 2007-08.
Besides, the income-tax collection target has been revised upward to 89.24 billion for the FY 2006-07 from Tk 85.00 previously following better collection performance.