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Tuesday, June 14, 2011
BusinessTk 40,000cr lost in incentive, tax evasion a year: NBR
Tk 40,000cr lost in incentive, tax evasion a year: NBR
Rejaul Karim ByronTax evasion and incentives cost Bangladesh Tk 40,000 crore a year, according to National Board of Revenue (NBR).
To offset the losses, the NBR has taken up a five-year modernisation plan for fiscal 2011-2016 with the aim of lifting the tax-GDP ratio to 13 percent from 9.3 percent.
According to the reform plan placed in parliament on Thursday, less than 1 percent of the country's 16 crore population pays income tax, the lowest in South Asian countries.
Tax evasion is persistent even though a significant amount of potential revenue is sacrificed in the form of tax incentives.
Together, curbing tax evasions and dealing with incentives could add 5 percentage points to the tax-GDP ratio, potentially adding Tk 40,000 crore to the total revenue collection, according to the reform plan.
Finance Minister AMA Muhith said a detailed timeframe has been included in the implementation programme of the NBR's modernisation plan.
The tax administrator will formulate a detailed work-plan by September this year in line with the strategic paper. It will contain the methodology, detailed timeframe and demand for resources, the minister said.
The NBR reform activities will be conducted in the next five years in the light of the final plan framework, Muhith added.
Apart from boosting up tax revenue, the plan also aims to provide exemplary customer services to taxpayers through an enabled tax administration that will include e-registration, e-filing of tax returns, e-payments or refunds. It also plans to settle 80 percent of the pending court cases by 2016.
The objectives of the five-year plan also include setting up an efficient, integrated tax accounting network that correctly accounts for, reconciles and records tax payment information at transactional level of all three wings of the NBR.
The accounting network will also make visible the information on real time basis to taxpayers and all other stakeholders including the government, NBR, tax officials, and Bangladesh Bank.
The automation will be implemented over a period of five years and features well-defined goals and sub-goals under nine strategic areas.
These include: tax policy reforms; redefining the status and regulatory power of NBR; restructuring NBR according to function and size; enforcement improvement programme; integrated revenue management programme; automation of the tax processes; and strategic communication and taxpayer outreach, education and assistance.
To reform the tax policy, specific timeframe, July 2011 to January 2012, has been fixed.
Besides, new income tax law and value-added tax law will be formulated and customs tariff will be restructured and rationalised.
The NBR hopes new tax policy and administrative system will raise the number of income taxpayers in the country to at least 20 lakh from the present 10 lakh.
The new tax policy seeks to achieve the target by making it simple for the honest taxpayers to meet their tax obligations with a minimum inconvenience and with no additional compliance cost. The plan will also seek to increase the cost of non-compliance and make the likelihood of detection of evasions much higher.
According to the automation plan, the tax administration reforms will segregate and consolidate non-customer facing non-discretionary, high volume mass tax tasks in a centralised processing centre for efficient processing and closure.
The centre will free up many NBR officials, who mostly now work manually, to be assigned for tasks such as compliance, customer service, collection, market surveys and intelligence gathering.
BusinessTk 40,000cr lost in incentive, tax evasion a year: NBR
Tk 40,000cr lost in incentive, tax evasion a year: NBR
Rejaul Karim ByronTax evasion and incentives cost Bangladesh Tk 40,000 crore a year, according to National Board of Revenue (NBR).
To offset the losses, the NBR has taken up a five-year modernisation plan for fiscal 2011-2016 with the aim of lifting the tax-GDP ratio to 13 percent from 9.3 percent.
According to the reform plan placed in parliament on Thursday, less than 1 percent of the country's 16 crore population pays income tax, the lowest in South Asian countries.
Tax evasion is persistent even though a significant amount of potential revenue is sacrificed in the form of tax incentives.
Together, curbing tax evasions and dealing with incentives could add 5 percentage points to the tax-GDP ratio, potentially adding Tk 40,000 crore to the total revenue collection, according to the reform plan.
Finance Minister AMA Muhith said a detailed timeframe has been included in the implementation programme of the NBR's modernisation plan.
The tax administrator will formulate a detailed work-plan by September this year in line with the strategic paper. It will contain the methodology, detailed timeframe and demand for resources, the minister said.
The NBR reform activities will be conducted in the next five years in the light of the final plan framework, Muhith added.
Apart from boosting up tax revenue, the plan also aims to provide exemplary customer services to taxpayers through an enabled tax administration that will include e-registration, e-filing of tax returns, e-payments or refunds. It also plans to settle 80 percent of the pending court cases by 2016.
The objectives of the five-year plan also include setting up an efficient, integrated tax accounting network that correctly accounts for, reconciles and records tax payment information at transactional level of all three wings of the NBR.
The accounting network will also make visible the information on real time basis to taxpayers and all other stakeholders including the government, NBR, tax officials, and Bangladesh Bank.
The automation will be implemented over a period of five years and features well-defined goals and sub-goals under nine strategic areas.
These include: tax policy reforms; redefining the status and regulatory power of NBR; restructuring NBR according to function and size; enforcement improvement programme; integrated revenue management programme; automation of the tax processes; and strategic communication and taxpayer outreach, education and assistance.
To reform the tax policy, specific timeframe, July 2011 to January 2012, has been fixed.
Besides, new income tax law and value-added tax law will be formulated and customs tariff will be restructured and rationalised.
The NBR hopes new tax policy and administrative system will raise the number of income taxpayers in the country to at least 20 lakh from the present 10 lakh.
The new tax policy seeks to achieve the target by making it simple for the honest taxpayers to meet their tax obligations with a minimum inconvenience and with no additional compliance cost. The plan will also seek to increase the cost of non-compliance and make the likelihood of detection of evasions much higher.
According to the automation plan, the tax administration reforms will segregate and consolidate non-customer facing non-discretionary, high volume mass tax tasks in a centralised processing centre for efficient processing and closure.
The centre will free up many NBR officials, who mostly now work manually, to be assigned for tasks such as compliance, customer service, collection, market surveys and intelligence gathering.
