Tk 650b income tax collection target likely for FY \\\'15

The government is likely to fix a target of mobilising Tk 650 billion as income tax for the next fiscal year (FY) by increasing the collection of withholding tax and taking a few new tax measures.
The target, if fixed, would be 35.41 per cent higher than that of the current fiscal, sources said.
The withholding tax, known as advance income tax (AIT), currently contributes some 53 per cent of the aggregate income tax collection. It is likely to witness a substantial rise in the next fiscal through new measures.  
Income tax would constitute some 44 per cent of the aggregate tax collection target for FY 2014-15 -- about Tk 1.49 trillion against the current Tk 1.25 trillion.
However, tax officials and experts have found the income tax collection target for next FY an ambitious one, particularly when the government has a plan to cut the corporate tax rates.
Former finance adviser to the caretaker government AB Mirza Azizul Islam said the target for income tax collection seems unrealistic as the income tax rates might undergo cuts following recommendations by various stakeholders.
"Already, the NBR has cut tax rates on export income and there is also proposal of further cut on the same," he said.
Officials estimate tax cut at source on export earning will cause an annual tax revenue loss of Tk 18 billion.
He, however, said the aggregate tax collection is achievable by attaining 6.0 per cent GDP growth and keeping inflation rate at 7.0 to 7.5 per cent.
To increase domestic revenue collection, the NBR is exploring other avenues including spreading net of wealth tax and focus on growth centres to attain higher growth of tax collection.
A senior NBR official said some significant changes might be brought to the existing tax areas that could generate more revenue.
Re-valuation of land and house property is under active consideration of NBR which is the possible way to collect a big chunk of tax from the well-off section of people, he added. In 2009-10, aggregate tax revenue collection target was Tk 610 billion while target for income tax was Tk 165 billion.
Such a better growth of income tax collection was due mainly to increased contribution of corporate and withholding tax, he added.
He felt the need for reducing the size of the shadow economy and checking the capital flight.
In the current FY, there is an opportunity for voluntary disclosure of black money. Also, the government offered black money whitening scheme through the purchase of flats.
The official said the taxmen accept the undisclosed money without raising ay question on source of the income but other agencies can scrutinize the issue.
"People will not avail the facility unless the government removes the fear factor," he added.
Direct tax collection contributed only 9.72 per cent of the total tax revenue that the NBR targets to increase to 51 per cent by 2020-21.