Drives to raise taxpayers\\\' numbers turn \\\'futile\\\'

The ongoing drives by the government's revenue authority could hardly raise the number of individual taxpayers amid relatively higher dropout of the existing ones, tax officials said.   
Official figures revealed a stagnant state in the number of individuals' tax returns over the last couple of years, even after different initiatives, including countrywide new taxpayer survey.
Some 835,000 individual taxpayers submitted their tax returns until November 30, the deadline for the current fiscal year, 2014-15, according to provisional data of the income tax wing, finalised Monday.
Officials said some 200,000 taxpayers sought additional time by submitting applications to their respective tax circles.
Last year, the number of tax returns submitted by the individual taxpayers was 1.0 million.  
Taxmen cited faulty operation system of new taxpayers' survey and lack of coordination among income-tax wings as the prime reasons for failing to raise the number of tax returns. However, survey activities every year unveiled new taxpayers in different locations across the country.
The taxmen and experts said the survey activities of the National Board of Revenue (NBR) is running in a traditional way that needs an overhauling to reap benefit form the move to raise the number of taxpayers.
They said the number of individual taxpayers in Bangladesh, 1.0 million in total, is very poor compared to other South Asian countries.
NBR carries out external surveys every year, which, according to tax officials, is yet to be reflected on the number of tax returns.
According to official data, the taxmen surveyed some 731,588 new taxpayers in 2009-2012 period. Of the new taxpayers, 547,154 have opened new tax files and are bound to submit tax returns.
The number of tax returns remained almost stagnant between 0.8 and 1.1 million in that period, the NBR data showed.
The experts raised question as to how those surveyed taxpayers escaped the eye of the taxmen even after submission of tax returns once.
Row over survey zones and field tax offices, authorization problem, and inadequate number of tax officials were also cited as reasons why the number of taxpayers did not increase despite surveys.
Talking to several senior tax officials, the FE found lack of coordination among the officials of the internal wings of the income-tax department.
Some of them alleged that the survey wing could not work properly, as monitoring authority of surveyed taxpayers is under another department.
Some officials alleged that they found duplication in the number of surveyed people, as many of the taxpayers in the survey data already held TINs.
However, the tax officials also acknowledged reluctance of field-offices to monitor surveyed taxpayers and motivate them to submit tax returns every year.
There is no complete study or impact analysis yet on the outcome of the survey activities although NBR is launching external survey every year amid enthusiasm.
However, the revenue board has a separate survey wing, formed to strengthen the survey activities for raising the number of taxpayers.
In every budget, the government sets a target for new taxpayers under survey programme. Surprisingly, the government remained silent on how many new taxpayers were added to the tax-base at year-end through survey.  
Md Alauddin, former member of survey and inspection wing of income-tax department, in 2013 conducted a study for the first time on outcome, challenges and limitations of the survey.
In a detailed report, titled 'successes and future action plan, challenges and prospects of tax survey and inspection wing', he scrutinized the overall activities.
He found the field-offices pre-occupied with regular assessment and for attaining revenue collection target. They have insufficient time to concentrate on external survey.
In the report, Md Alauddin has drawn a five-year strategic plan to boost the number of new taxpayers.
He recommended a separate survey and inspection cell for each zone, named 'survey, intelligence and inspection cell (SIIC)', to conduct the survey.
Other recommendations include a survey databank, customised survey software, adequate manpower, and taskforce for inspection etc.
The plan has also been shared with the NBR high-ups for framing future survey programme.
Talking to the FE, Md Alauddin said the plan has been submitted to NBR that would be helpful in conducting successful survey.
"As per survey data, I have found the number of new taxpayers, tax collection and tax files increased every year."  There is a projection to increase the number of taxpayers to 5.0 million by 2021, he added.
In most of the previous surveys, the board has found around 70 per cent of the new taxpayers from businesspeople, who were running their businesses without Taxpayer Identification Number (TIN).
Some tax officials said the newly-identified taxpayers often disappear by changing their address, when the taxmen moved to follow up the surveyed people.
Sources claimed that 90 per cent of the new taxpayers, found through different surveys, remained out of the tax-net due to lack of supervision.
Every year, the government spends a considerable amount of money for conducting the external survey and preparing publications to popularise the survey. But, it has left a very negligible impact on increasing number of income taxpayers.
Mohammad Abdul Mazid, chairman of Chittagong Stock Exchange (CSE) and former NBR chairman, said the tax authority should overhaul the survey system.
"Effective monitoring and change in survey process can help the government raise the number of taxpayers."
He also suggested sector-wise and profession-wise scrutiny to trigger the revenue collection and the number of taxpayers, besides the survey.
The tax officials and experts said post-survey activities should be evaluated properly to reap benefit from the external survey.
The country is reeling with a poor tax-GDP ratio, which is the poorest among the south-east Asian countries. Only 1.0 million people submitted tax returns last year, out of 160 million population.
Currently, the number of valid TIN-holders is 1.7 million. Of them, some 1.3 million have obtained fresh e-TIN until November 2014 by reregistering them or obtaining new one.
Countrywide new taxpayers' survey could be the most effective way to increase the number of income taxpayers and increase collection of direct tax.
Proportion of direct tax is 29 per cent in Bangladesh, while it is 56 per cent in India, 37 per cent in Pakistan, and 75 per cent in Malaysia.
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