Positive response to NBR's tax fair
Wednesday, 29 September 2010
The first-ever tax fairs, organised by the National Board of Revenue (NBR), is reportedly drawing encouraging response from the existing as well as the potential taxpayers. On the first couple of days of the five-day event, several thousand existing taxpayers submitted their annual tax returns and many more got their tax identification numbers (TINs) at the fair venue in Dhaka, presented as hassle-free and convenient one-stop service. Hundreds of people are also visiting the fairs out of curiosity. Though taxpayers have complained about insufficient space and insufficient number of tax collection booths at the fair venues (NBR is holding a similar fair in the port city of Chittagong), they are impressed by the overall environment, marked by an air of festivity and cooperation from taxmen.
The taxmen, according to media reports, are surprised by the response from the people, including the existing and the potential taxpayers. The response itself gives clues to some issues that will need to be examined by the taxmen. Why do people are so much enthusiastic about paying taxes on their own at the fair? Why are they so much shy of going to tax offices to submit returns personally? The answers -- hassles and palm-greasing -- to these questions are known to the taxpayers as well as tax collectors. If a taxpayer decides to submit tax returns personally, he or she is required to go to banks to deposit the tax money and wait in long queues in tax offices that, unfortunately, offer an unfriendly environment. Besides, he or she has to collect a number of documents. Most taxpayers like to avoid such hassles and they hire the services of tax lawyers. To their woe, many such lawyers are found to be unscrupulous in dealings with their clients.
As part of human nature, many people, having taxable income, do not like to part with a portion of their wealth as tax. However, the propensity to evade tax becomes even stronger if tax payment involves hassles. There is no denying that the prevailing situation in tax offices is in general better than what was even four to five years back. One may like it or not, a part of the credit for effecting some changes in the mindset of both taxmen and taxpayers goes to the military-backed caretaker government. But the country has to go a long way to create an ideal tax environment. And to induce more and more people to be tax-compliant, the government would, on the one hand, have to remove hassles the taxpayers usually face in tax offices and it should also offer some benefits to them, on the other.
It is not feasible on the part of the NBR to organize tax fairs every year in all major cities and town to ensure a hassle-free environment for tax payment. Rather, the creation of an identical environment in all tax offices across the country round the year should be at the top of its agenda. Automation of the NBR is one aspect. What is more important is the attitudinal change of the taxmen. Very often taxpayers complain about the absence of any direct benefit, fiscal or otherwise, to the taxpayers. And they have also reasons to refer to incentives that are offered to taxpayers in many developed and developing countries. Wastage, misuse and misappropriation of taxpayers' money also discourage the existing taxpayers and encourage tax evasion. However, any radical change cannot be expected overnight. The ongoing tax fairs in Dhaka and Chittagong are steps in the right direction to motivate more and more people to pay tax. But raising the level of tax-compliance to a desired one would need something more than that.
The taxmen, according to media reports, are surprised by the response from the people, including the existing and the potential taxpayers. The response itself gives clues to some issues that will need to be examined by the taxmen. Why do people are so much enthusiastic about paying taxes on their own at the fair? Why are they so much shy of going to tax offices to submit returns personally? The answers -- hassles and palm-greasing -- to these questions are known to the taxpayers as well as tax collectors. If a taxpayer decides to submit tax returns personally, he or she is required to go to banks to deposit the tax money and wait in long queues in tax offices that, unfortunately, offer an unfriendly environment. Besides, he or she has to collect a number of documents. Most taxpayers like to avoid such hassles and they hire the services of tax lawyers. To their woe, many such lawyers are found to be unscrupulous in dealings with their clients.
As part of human nature, many people, having taxable income, do not like to part with a portion of their wealth as tax. However, the propensity to evade tax becomes even stronger if tax payment involves hassles. There is no denying that the prevailing situation in tax offices is in general better than what was even four to five years back. One may like it or not, a part of the credit for effecting some changes in the mindset of both taxmen and taxpayers goes to the military-backed caretaker government. But the country has to go a long way to create an ideal tax environment. And to induce more and more people to be tax-compliant, the government would, on the one hand, have to remove hassles the taxpayers usually face in tax offices and it should also offer some benefits to them, on the other.
It is not feasible on the part of the NBR to organize tax fairs every year in all major cities and town to ensure a hassle-free environment for tax payment. Rather, the creation of an identical environment in all tax offices across the country round the year should be at the top of its agenda. Automation of the NBR is one aspect. What is more important is the attitudinal change of the taxmen. Very often taxpayers complain about the absence of any direct benefit, fiscal or otherwise, to the taxpayers. And they have also reasons to refer to incentives that are offered to taxpayers in many developed and developing countries. Wastage, misuse and misappropriation of taxpayers' money also discourage the existing taxpayers and encourage tax evasion. However, any radical change cannot be expected overnight. The ongoing tax fairs in Dhaka and Chittagong are steps in the right direction to motivate more and more people to pay tax. But raising the level of tax-compliance to a desired one would need something more than that.