WEALTH SURCHARGE : Only 10,931 taxpayers show assets above Tk 2.25cr [ Tritiyo Matra News ]

WEALTH SURCHARGE : Only 10,931 taxpayers show assets above Tk 2.25cr

Local February 18, 2016

Both the number of wealthy people and collection of wealth tax were on the rise in the country over the last few years, but the figures were too low in the context of the country’s economic size, according to the data of the National Board of Revenue.
The collection of wealth tax, commonly known as wealth surcharge, went up by 22 per cent while the number of people with net assets above Tk 2.25 crore registered a 7.13-per cent growth in last fiscal year of 2014-2015 from the previous year, the data released on Wednesday showed.
According to the data, the revenue board collected Tk 254.26 crore in wealth surcharge from 10,931 rich people having net assets above Tk 2.25 crore each in last year.
In the FY 2013-2014, a total of 10,152 people had paid Tk 208.39 crore as wealth surcharge based on their income tax returns.
NBR officials said that though the payment of wealth tax and the number of well-off people had been increasing over the years in the country, the number of wealthy people remained unusually and unrealistically low as most of them hid their actual assets in income tax returns.
Many wealthy people showed lower prices of assets and higher liabilities in their income tax returns, they said.
They said that the number of well-off people should be multiple times higher considering the size of economy and assets belonging to people live in luxurious areas in the country.
Since the introduction of wealth tax four years ago in the FY 2011-2012, both the collection and number of well-off people, however, have been rising every year, they said.
‘The surcharge was collected from the well-off people based on their net assets after excluding total liabilities from the total assets which they declared in their income tax returns,’ a senior official of the NBR told New Age.
He said that in most cases the prices of assets were declared much lower than their actual market prices in the income tax returns by the taxpayers in absence of an updated revaluation system for property, particularly land and house property.
According to the law, mortgages secured on property or land, unsecured loans, bank loan and others liabilities are excluded from assets.
Most of the rich people, particularly businessmen, show huge bank loans and other liabilities in the income tax returns, the official added.
According to the Income Tax Ordinance-1984, individual taxpayers having net asset above Tk 2.25 crore are required to pay wealth tax at different rates ranging from 10 per cent to 25 per cent of payable income tax based on their net assets shown in their income tax returns.
The government in the budget for the current fiscal year set the minimum amount of surcharge at Tk 3,000 for each wealthy people.
According to the law, the surcharge-free assets limit is Tk 2.25 crore. The rates of surcharge are 10 per cent on assets above Tk 2.25 crore to Tk 10 crore while 15 per cent surcharge for net assets up to Tk 20 crore, 20 per cent for up to Tk 30 crore, 25 per cent for above Tk 30 crore.
According to the statistics, the NBR had received only Tk 65 crore in surcharge in the FY 2011-2012. In the following year, the revenue board got Tk 101 crore in surcharge from some 5,700 wealthy people.
According to the latest statistics, there are 7,589 wealthy people under the income tax offices in Dhaka and 1,748 in Chittagong.
There are 155 rich people with net assets worth above Tk 2.25 crore under the central survey zone of the NBR, 306 under Khulna, 90 under Rajshahi, 67 under Rangpur, 86 under Barisal, 234 under Sylhet, 184 under Narayanganj, 96 under Gazipur, 225 under Comilla, 70 under Mymenshingh and 81 under Bogra income tax offices.