Enthusiasm at tax fairs and beyond

The just concluded tax fair, organised countrywide by the National Board of Revenue (NBR), was again a grand success.
If the amount collected as income tax this year is compared with that of the previous years, one would tend to consider the success as phenomenal.
At the first fair organised in Dhaka in the year-2010, the amount of income tax revenue fetched by the taxmen was a paltry Tk 1.13 billion. But the response from taxpayers was tremendous in the next year's fair. The amount of tax revenue collected at the fair in 2011 increased nearly fourfold.
In the next couple of years, it was the repetition of the 'success' story as the both of volume of tax collected and number of tax returns submitted at the venues of the fairs continued to record substantial rise.
However, the success, in terms of both revenue and tax returns, was largely attributed to the gradual expansion of the event to district headquarters from Dhaka and Chittagong. From the year-2013, the tax fair was extended to district headquarters.
The 'rush' of taxpayers, long queues and 'enthusiasm' witnessed at the annual tax fairs, unfortunately, are conspicuous by their nonexistence in tax offices across the country during the remaining period of a tax assessment year. Nor the phenomenal rise in tax collection is adequately reflected in the amount the taxmen collect as income tax.
The amount of income tax revenue collected in the fiscal year (FY), 2010-2011, was Tk 230 billion. The amount increased to Tk 429 billion in last FY 2013-14. The substantial increase in the receipts of income tax revenue in the last fiscal is partly attributed to the increase in the at-source deduction of  income tax, the most important being the deduction of 15 per cent tax from interest income of bank account holders having no TINs (tax identification numbers). The number of tax returns submitted in FY 2010-11 was Tk 0.8 million. The same increased to Tk 1.38 million in FY 2013-14.
There is no denying that there have been improvements in income tax revenue collection in recent years. The military-backed caretaker government, to be honest, was the trend-setter. The fear factor had played a role in it, no doubt. But even after the exit of that government, the momentum created in tax payment was not lost totally.
But the fact remains that a civilian government can hardly do anything that would create panic among the taxpayers. So, the motivational campaign to encourage more and more people to pay tax was the right action on the part of the NBR.
A large section of the population having taxable income continues to be tax-shy. The motivational campaign like the tax fair can help encourage them to pay tax. But for getting better results, the government has to do something more concrete. It should improve the operational efficiency of the taxmen and reduce the extent of unfair practices in the whole taxation system.
The people concerned do need to understand the reasons behind the taxpayers becoming unusually enthusiastic about the payment of tax at the tax fairs. It is understood that they find the tax payment at fairs relatively hassle-free as none would dare demand a few extra bucks for helping taxpayers there. The tax fairs, in fact, also help the taxpayers save money they would have spend on tax lawyers or consultants or middlemen.
So, to get taxpayers' response that is identical to what is seen at the tax fairs the government would have to ensure a hassle-free and conducive environment at all tax offices across the country round the year.
The organisation of tax fairs of motivational nature for five consecutive years should have been enough for both taxpayers and taxmen. But in the case of Bangladesh it is hard to make such a conclusion. The tax offices, apparently, are not yet ready to deliver services qualitatively equivalent to that offered at the tax fair venues that remain under public scanner.  
Moreover, the culture of tax evasion in the Bangladesh is quite strong. It would take some more time to effect a change in the situation on the ground.
However, side by side with more proactive approach on the part of the NBR, the government would have to ensure some tangible benefits for the individual taxpayers in areas of education, health and transportation. Most people here tend to believe that the large part of their tax money is either wasted on the incompetent government officials or embezzled by the corrupt section of politicians and officials through various mechanisms.  
A radical change in the overall governance is a must to get the people truly motivated to pay tax, at least, near to the right amount. Such a change, as of now, might seem a remote possibility, but it has to happen at one point of time for the greater good of the nation.

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