Not a sound rationale for wealth tax at this stage

The government, as the media reports said, is thinking about introducing wealth tax. People with more than one house or plot of land would be subjected to such a tax. But already people are required to pay tax on any income generated out of much property or wealth or immorable as sets. So, it is questionable whether taxing them further in the name of wealth tax would be supportive of the policy of wealth formation or allowing savings in the first place. Already, the tax-payers are being exploited in cases such as like paying double or triple income tax. Even after paying his income tax on earnings from job or business, a person is, thus, obligated to pay another so-called income tax for maintaining a car. Besides, if he or she has savings certificates, then too, he or she has to pay an income tax on their interest accruals. Furthermore, dividend earnings from share-holdings of companies are also subjected to income tax at personal level, even though such dividends are paid out of post-tax profits of the companies. If the companies would not have paid taxes on their profits, more dividends could be paid out to their share-holders and the same, received as dividends income, could be subjected to payment of income tax at the personal level. The issue of 'double taxation' would not have arisen here in that event. And now the additional burden in the from of wealth tax, reportedly on immorable property beyond a certain limit, will have to paid by the individuals, if the government finally approves the proposal for imposing such taxes. In case of transfers of such immorable property, the capital gains tax, lender the existing provisions of the Income Tax Act, have to be paid by the sellers, besides the payment of taxes, the rates of which have been rising over the years, by the buyers of such immovable property. Still then, the government is now reportedly set to impose another kind of tax, in the name of wealth tax. Under the present circumstances of high inflation, such incidence of multiple taxation on income must be seen as unfair to the majority of the eligible but not rich taxpayers. The wealth tax would simply be adding to their burdens. In a country like Bangladesh with a large population, not many are noted for paying taxes. But it needs to be borne in mind also that that only a relatively smaller number in the otherwise vast population of the country are in any shape to pay well the present taxes and ones to be introduced. Squeezing people to get more taxes cannot be the best policy when they are not so much in a position to bear the burden of such taxes. The best results in taxation can be obtained when the economy is invigorated by appropriate policies and measures of the government, and potential taxpayers are motivated and not coerced to pay their taxes out of their free will to do so and from their actual improved abilities to pay additional or higher taxes. And one of the major reasons for tax evasion or avoidance in this country is the high rate of taxation -- and that rate also keeps on rising further from time to time. The authorities concerned in Bangladesh do not seem to understand the realities and appreciate the fact that lower rate of taxation leads to better tax compliance. The other side to expanding the taxation base involves the setting up of institutional capacities for the purpose. The value added tax (VAT) is a major source of revenue. But out of the country's 64 districts, more than 40 per cent of them do not have proper VAT offices to monitor and collect tax from professionals and business. Similarly, the customs administration also requires immediate recruitment of manpower to do its job well. And for fairness and economic and social justice, the taxation departments should concentrate their activities on relevant areas for bringing those otherwise eligible tax payers but do not care to do so, within the tax net and also on the big tax dodgers who are presently not few in number.