Legalisation of untaxed money yields little
In the 45 years since the country’s independence in 1971, only Tk 18,376 crore untaxed money has been legalised under the scopes offered by governments from time to time in various ways.
The National Board of Revenue has collected Tk 1,529.46 crore in tax from the untaxed money-holders during the period raising question as to who have benefitted from the unconstitutional, unethical and unfair scopes.
In the just-announced fiscal measures, the government has offered the opportunity to legalise untaxed money in most relaxed ways despite the opposition from economists and rights groups.
While these economists and rights groups said that it was an unfair treatment for the general taxpayers, NBR chairman Abu Hena Rahmatul Munim said that they had different thoughts in their minds amid the COVID-19 crisis.
He told New Age on Saturday that the current scope was offered as part the government plan to introduce online return for the taxpayer identification number, shortly known as TIN, holders.
Finance minister AHM Mustafa Kamal in the parliament proposed the mandatory return for all TIN holders and offered Tk 2,000 tax waiver for submitting it electronically.
The finance minister also offered an opportunity to legalise undisclosed money by investing it in land, flats, cash and savings certificates by paying only a 10 per cent tax in the new fiscal year.
Rahmatul Munim said that since the NBR wanted the TIN holders to switch over to the electronic system such bounty for them was imperative to erase errors in the current files updated by the taxpayers non-digitally over the years.
Referring to a study, he said that hundreds of taxpayers did not declare assets with their tax files as most of them relied on tax lawyers to prepare the TIN returns.
He alleged that many tax lawyers often misguided their clients by furnishing information beyond the knowledge of the taxpayers just to complete the formality.
Transparency International Bangladesh executive director Iftekharuzzaman said that they had already demanded the cancellation of the scope as it was unconstitutional, unethical and unfair.
The country’s oldest chamber body, Metropolitan Chamber of Commerce and Industry, opposed the provision for legalising untaxed money in the proposed national budget saying that it would seriously discourage the compliant taxpayers, and in fact would be seen as penalising them.
Experts said that not for even once in past, the government got the expected response from the untaxed money holders except in 2007–09.
In those three years, Tk 9,682.99 crore, over 50 per cent of the overall untaxed money since the country’s Independence, flowed into the mainstream economy.
A ministry of finance paper said that the ‘size of the underground economy in Bangladesh was only 7 per cent of the nominal GDP in 1973’, but it ‘increased phenomenally ‘ to stand at 62.75 per cent of the GDP in 2011.
Former NBR chairman Abdul Mazid said that the continuation of such scopes encouraged untaxed money generation.
He blamed the reluctance shown by the government over the years to carry out necessary reforms for bringing about dynamism in the tax administration.
On Friday in a post-budget press conference held virtually Mustafa Kamal stressed the need for automaton in the revenue administration for mobilising revenue and improving the country’s tax-GDP ratio, one of the lowest in the South Asia region.
He lamented that they could not install machines to collect VAT due to COVID-19 in the outgoing fiscal year.
He expected that the installation of machines and automation of the revenue board would help mobilise higher revenue and take the tax-GDP ratio to 15 per cent in the near future.
News Courtesy: www/newagebd.net
