FM, NBR find DCCs\' proposal too complex

The city-dwellers are unlikely to pay new 'cess' (an assessed tax), proposed by two city corporations recently, as the finance minister has found it too complex to implement along with the existing tax system.
Finance minister AMA Muhith's observation came after the income tax wing of the National Board of Revenue (NBR) sent a summery seeking his instruction on the proposal of the two city corporations.
The income tax officials had also given their negative opinion in the summery over introduction of 'cess'.
The tax authority found no legal provision to impose such tax.
"It should be verified whether there is any such evidence worldwide on collection of local government's tax through the central government," the income tax wing said in the summery to the finance minister.
The finance minister in a note said a basic working paper is necessary to know how the two city corporations will work to enhance its income.
"The Ministry of Local Government can take a high-level initiative in this regard," he wrote.
The NBR proposed to form a joint working group to examine the proposal of the city corporations.
However, the finance minister did not give his consent to the proposal.
As per income tax law, it is not possible to keep accounting on how much a taxpayer earns under a city corporation, the summery said.  
The two city corporations proposed to impose the new tax on the city people to meet their expenditures.
On July 3, Mayors of two city corporations, in a partnership dialogue, proposed to the National Board of Revenue (NBR) to impose 'cess' on city- dwellers.
In the summery, the income tax wing said it will have to incorporate a new provision in the 'charging section' of the income tax ordinance for imposing 'cess' on income tax.
The section relating to the authority of the income tax officials needs to be amended to collect 'cess' through income tax officials.
"Income tax is a sell-assessment tax. Major part of the tax is being collected automatically. Taxpayers furnish income tax-related information in their respective tax returns. For imposition of 'cess', income tax return, demand notice, tax assessment form and overall income tax system need to be overhauled," the summery said.
The Dhaka South City Corporation Draft Rules, 2016, (9) has proposed a provision under which income tax records can be inspected and audited by the city corporation officials.
Income tax officials said they are legally bound to keep privacy of the income taxpayers' information. Other entities do not have any access to taxpayers' information as per income tax law.
Income tax law on tax collection, tax exemption, information collection and privacy of information can supersede any other law of the country as per Section 184 F of the Income Tax Ordinance.
"There is no scope to collect cess as per Dhaka South City Corporation Cess Rules, 2016 without amendment of the income tax ordinance 1984," it said.
The income tax department is operated under the government's supervision and income tax officials are government officials but city corporation officials are under local government, the summery said.
In the city corporation rules, 8 and 9, there is provision incorporated to make government officials accountable to the local government officials.
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