Tax authorities find 2013 as an uncomfortable year

Doulot Akter Mala | Published: January 01, 2014 00:00:00 | Updated: November 30, 2024 06:01:00

The outgoing 2013 was quite an uncomfortable year for the tax authorities as the government's overall revenue collection passed through a slow growth throughout the second half of the calendar year primarily due to the persistent political unrest.
Such less-than-expected growth of revenue earnings has also kept the government exchequer under pressure, officials and experts said.
According to them, large corporate taxpayers, including banks and financial institutions, faced a severe financial blow in the outgoing calendar year 2013.
Experts and tax officials feared that the government might face a shortfall worth Tk 100 billion in its aggregate internal revenue collection target for the current fiscal year.
The government set Tk 1.67 trillion as internal revenue collection in the budget for FY 2013-14. In the budget, the target for the National Board of Revenue (NBR) has been set at Tk 1.36 trillion that will be collected as income tax, customs duty and Value Added Tax (VAT) from domestic consumption and imported products.
Tax authorities are unlikely to achieve the ambitious target in revenue collection in the current fiscal year due to the continuous political unrest that has continued since October 2013. In 2012-13, the NBR missed its tax collection target for Tk 1.12 trillion by a sum above Tk 30 billion.
Banks and financial institutions, cigarette companies, mobile phone operators, import and domestic Value Added Tax (VAT) are the major sources of tax, revenue collection.
In 2013, majority of the banks saw decline in their profit. Banks pay 42.5 per cent tax on its income. Import of major revenue-generating commodities also dropped significantly amid the political turmoil.
In July-November period, the NBR faced nearly Tk 60 billion in shortfall against its target. The shortfall may be offset slightly by the end of the FY 2013-14 with the implementation of the government's development work. According to an estimate of the tax officials, the NBR could hardly collect Tk 1.25 trillion out of its target for Tk 1.36 trillion.
However, the NBR expects higher tax collection growth after completion of its digitalisation of tax administration.
Despite all these odds, the NBR continued its efforts to increase tax collection and ensure better services for the taxpayers by devising different fiscal measures and strategies.
Despite the unfavourable situation in revenue collection, the taxmen achieved remarkable success in the outgoing year of 2013 by introducing online TIN (Taxpayers Identification Number) on July 1. E-TIN is considered a landmark step to resolve the long-standing complexities over TIN issuance issues.
There had been widespread allegation against taxmen of harassment at the time of issuance of TIN that is mandatory for obtaining different services. The TIN issuance procedure has now been simplified and made transparent as it has been tagged with the National Identity Card of all citizens.Â Both existing and new taxpayers have started registering themselves for obtaining the new TINs.
To simplify the customs procedures, the NBR introduced Asycuda World System to Chittagong Customs House on July 1 in a bid to put in place a paperless customs clearance system. The system will be introduced to other customs houses gradually to establish interconnectivity with each other and the importers.
Aiming to introduce the new VAT law from 2015, the NBR also started implementation of the "VAT Automation Project" that got approval of the Planning Commission on October 8, 2013.
In 2013, the NBR offered the opportunities for disclosure of undeclared or 'black' money, without facing any question from taxmen. People can invest in purchase of flats and apartments with a reduced rate of taxes. The board expects Tk 6.0 billion tax from the opportunity in fiscal year 2013-14.
The opportunity for investing black money in the share market expired on June 30, 2013, with a poor response from the investors. Only 70 persons availedÂ the opportunity in FY 2012-13.Â Â
However, some 220 people disclosed their income voluntarily in FY 2012-13 contributing Tk 130 million in income tax to the public exchequer.
Expecting higher taxes from the well-off section of the people, the NBR introduced two slabs for collection of wealth tax. People having assets worth above Tk 20 million have to pay 10 per cent tax, in addition to their normal tax, while the surcharge will be imposed at a rate of 15 per cent for having assets worth Tk 100 million.
To monitor collection of the corporate tax, the NBR introduced another Large Taxpayers Unit (LTU) in Chittagong after it found that businesses had flourished in the port city.
Expansion of service centres across the country is also a significant step of the revenue authorities to motivate and facilitate taxpayers in payment of taxes. With the two existing service centres, the NBR is setting up five more in Narayanganj, Gazipur, Mymensingh, Rangpur and Bogra.
In 2013, the NBR also introduced localised minimum tax to expand the tax net in growth centres. It also introduced a new tax return form for salaried taxpayers to help them pay tax without harassment.