property owners in Bangladesh under tax authority scanner

Bangladesh finance minister Abul Maal Abdul Muhith on June 8 instructed the country's tax officials to go after property owners, who were identified through survey as eligible taxpayers, in an attempt to meet the ‘ambitious’ revenue collection target set in the proposed budget for the next fiscal year 2015-2016.

At a meeting with the field level officials of the National Board of Revenue, he also asked the taxmen to expand their survey of identifying eligible taxpayers in the upazila level.

Observing that the revenue board was capable to achieve the high revenue collection target which has been set around 31 per cent higher than the current FY’s target, Muhith said that there would be a big push on the taxmen for achieving the target more efficiently and conveniently.

The NBR got a list of property owners, including house and cars, through survey in previous years in Dhaka and other big cities as eligible to pay tax but who are currently out of the tax net, Muhith told reporters at a press briefing after the meeting.

‘The number of taxpayers will be doubled if we can bring the property owners, who were identified as eligible taxpayers, under the tax net. We will hit there [property owners] this time,’ said Muhith.

Currently, there are around 11 lakh taxpayers in the country while the NBR last few years identified around 6 lakh eligible property owners and business people who do not pay taxes. The NBR has a target to find out around 2 lakh eligible taxpayers this year.

Field-level commissioners of income tax, customs and value-added tax wings and other senior officials of the revenue board attended, , among others, the meeting presided over by NBR chairman Md Nojibur Rahman.

‘Revenue collection target for the next year is undoubtedly ambitious but I think the revenue board is fully capable to achieve the target,’ Muhith said.

‘Taxmen will have to deal with the people detected as eligible taxpayers very strictly to bring them under the income tax net instead of putting extra pressure on the existing taxpayers,’ he said.

Terming the country’s upazilas vibrant in terms of economic activities, the finance minister said that there would be income tax offices in each upazila by 2018.

The government set a revenue collection target at Tk 1,76,370 crore for the next fiscal year.  

Muhith said that collection in income and corporate tax would become the number one with the target of Tk 65,932 crore in the next year in terms of total revenue collection.

The finance minister also said that value-added tax would remain in the second position in terms of revenue collection.

Though VAT in not a progressive taxation considering its equal impact on all types of taxpayers, it is a very fair tax system as VAT is imposed only on value addition, he said.

Regarding gradual decline in contribution of supplementary duty to overall revenue collection, he said that it would reduce further in coming years and by 2018 there might be no SD.

The government may also reintroduce slab-wise minimum income tax for taxpayers living in urban and rural areas following recommendations from the Cabinet.

In the budget, Muhith proposed minimum income tax at Tk 4,000 for all, scrapping the current three slabs of tax rates from Tk 3,000 to Tk 1,000 for people living in city corporations, districts headquarters and rural areas.

‘The minimum income tax may be same for taxpayers in Dhaka and Chittagong and for taxpayers in other cities, districts and upazila levels it will be slightly lower,’ he said.