The National Board of Revenue (NBR) deserves thanks for taking initiatives to reduce harassment by tax officials. But, such steps should not be kept within the regime of papers/documents only. We, the people of all walks of life, feel that complicacy in tax laws always opens the space for such harassment. To reduce it, the tax laws should be user-friendly by way of making those transparent and easily understandable.
Tax rates and investment opportunities have to be made simplified. Instead of creating different slabs of tax rates, it should be within one or two slabs and should be rational. Tax officials have also to submit their tax returns along with their asset and liability statements to a different and independent authority so that their incomes also come under strict surveillance and scrutiny and scope of harassment of taxpayers are reduced and alleviated by laws.
It is to be mentioned that under 'Universal Self- Assessment', the unscrupulous tax officials scan almost all the files/returns submitted by the taxpayers in the name of audit bypassing the motto of motivating people towards payment of taxes without intimidation and to avoid the devils mentioning tenacious reasons of tax dodging though the taxpayers meet all the conditions as per prevailing laws. In this regard, proper benefit of laws does not reach the innocent people. In most of the cases, in connivance with some unscrupulous officials, a large number of people find no other alternative but to conceal their actual income and pay tax at the lowest rate which is not commensurate with their tax liability even if they are paying tax which might be hundred times lesser than that of the tax rate to be leviable. In metropolitan city area, a large number of people are living. But among them the number of taxpayers holding TIN is very few even though some of them are holding it due to some compelling circumstances (i.e. in times of purchase of land/buildings or in matters associated with some trade bodies or other activities).
On the other hand, there are a lot of departmental stores, shops of different category/nature (i.e. small, medium and large) in Dhaka and other metropolitan areas and the number of taxpayers compared to such building owners/shop owners is very insignificant and not comparable. So, the number of taxpayers can be increased manifold if an honest and strenuous drive is made.
Due to lack of control, supervision and monitoring, tax evasion, in connivance with officials, is also going on in the field of VAT and Customs duty. Most of the shops/business houses are determining the prices after adding VAT, but a few of them are depositing VAT to the government exchequer. Moreover, Customs duty also is not determined on the basis of actual price due to corruption by way of over/under-invoicing or through application of other techniques.
   So, to widen tax/VAT net, the following may be considered as tools:
1. Tax rate for an individual has to be maximum 10/15 per cent on flat rate (simplified and flat tax rate) would make people pay tax happily due to its simplification and reduced rate. It is to be mentioned that after deducting investment allowances and other admissible expenses, the rate of tax will not be more than 15 per cent.
2. To widen tax/VAT net, the number of tax/VAT payers can be increased by way of stopping pilferage,
3. To reduce/alleviate/stop pilferage, stringent and tougher provision(s) are to be incorporated for tax dodgers and tax officials with its proper implementation,
4. Honest and actual tax/VAT payers and tax/VAT officials need to be rewarded by way of lucrative incentives,
5. Salary and compensation of tax officials have to be in commensurate with market scenario/inflation/living standard,
6. Different privileges/packages/ incentives have to be offered/extended to tax/VAT payers,
7. Tax net has to be widened and transparent system to be adopted towards stopping/eliminating unauthorised income,
8. A separate watchdog has to be engaged to identify sources of assets/income earned by tax/VAT officials,
9. Zakat is to be considered and should be deducted from tax liability,
10. All notices are to be served electronically (i.e. by e-mail or other means) instead of manual system, so that no scope can be given to temper such a notice,
11. Online tax return submission process has to be started soon,
12. Linkages with the NBR, the Bangladesh Bank and banks have to be made so that every transaction can be monitored/identified, if deemed fit,
13. Surveillance software has to be introduced to identify persons evading income tax though having income over the minimum tax threshold and to identify transactions of such taxpayers not matched with their income/ expenses as disclosed,
14. Super or additional tax has to be imposed only after widening tax/VAT net,
15. All business transactions have to be made through a process so that reflection of such transactions can be reflected in his/her/their bank accounts as well as the NBR's domain,
16. A major portion of the government's revenue comes from indirect tax such as VAT, Customs duty and other duties. So, automated and stringent surveillance system can reduce/eliminate impediments of collecting revenue. In this regard, a uniform system has to be implemented to identify each transaction.
The writer is SVP and Company Secretary of the Jamuna Bank Limited, Head Office. mmreza74@gmail.com
Mopping up more tax revenue
Malik Muntasir Reza | Published: September 06, 2014 00:00:00 | Updated: November 30, 2024 06:01:00
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