Changes in income tax ordinance likely
Sunday, 3 June 2007
The National Board of Revenue (NBR) is likely to bring about changes in the existing income tax ordinance as it emphasises on taking measures in the next budget to plug loopholes in tax evasion.
"We will focus on the areas where income tax evasion is widespread to enhance tax generation in the upcoming fiscal," said a senior NBR official.
There is little scope to address the growing government dependency on the income tax department by increasing tax rate, he added.
The best way to boost income tax generation is to plug loopholes in tax evasion by bringing changes in various sections of the Income Tax Ordinance 1984, he said.
The official, however, does not rule out a change in existing income tax slabs.
Sources said the income tax department identified the areas in the ordinance where changes can be made. The issue was discussed at a meeting with finance and planning adviser Mirza Azizul Islam last week.
The changes are likely to be made in the section 83A, 83AA, 83AA of the ordinance, which deal with the self assessment of individual tax payers, self assessment of the private limited companies and assessment on the basis of report of a chartered accountant respectively.
The NBR may toughen the section-93 to discourage taxpayers to hide income in tax assessment.
Besides, changes may take place in the section-82B that deals with assessment on the basis of return.
The changes may also be brought in the ordinance to curb the practice of taxpayers to depend excessively on the income tax lawyers in filing the tax return, source added.
The taxmen believe that dependence by the taxpayers on the tax consultants encourages the taxpayers to hide financial information in the return and it also creates gap between taxmen and taxpayers.
The revisions are likely to bring major changes in relationship between taxmen and the taxpayers that will eventually benefit the NBR in its efforts to raise the income tax generation.
According to senior official of the large taxpayers unit (LTU) that deals with the country's 274 top taxpayers, there is no need for the NBR to increase the existing tax slab too high.
Terming the present growth of the income tax as "very good", the official said the NBR has to make upward adjustment of the LTU target at Tk 31 billion from Tk 29 billion for the outgoing fiscal.
He attributed the unprecedented growth to the growing awareness of the taxpayers and the recent anti-tax evasion drive by the non-political caretaker government.