Reforming the tax administration will be possible only if taxmen change theirorthodox mindsets and view taxpayers as 'clients,'business leaders and policy makers said on Saturday.
They suggested a paradigm shift in the tax administration for a simple, equitable, transparent and accountable tax system.
They made the suggestions at a virtual dialogue, arranged by Resurgent Bangladesh on 'Towards a conducive tax system: The reform imperative and priorities.'
Planning minister MA Mannan was chief guest at the programme. Dr. MashiurRahman and Salman F Rahman, advisers to the Prime Minister were the special guests.
The Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI) president NihadKabir presented a keynote paper at the programme.
M MasrurReaz, chairman of the Policy Exchange, moderated the dialogue.
Speaking at the dialogue, Salman F Rahman said mindsets of the taxpayers and taxmen should be changed to bring reform in the tax administration.
He said the NBR chairman and secretary to the Internal Resources division (IRD) should not be the same person.
He said an NBR chairman should be appointed for at least five years to carry on the reform activities.
He said the dependence on customs duty has to be reduced gradually by giving more focus on direct taxes.
He regretted any reform activities face resistance from different quarters.
The planning minister said there are huge incentives for businesses in Bangladesh compared to those of Vietnam.
He laid emphasis on conducting study and impact assessment on the current taxation regime.
MrMannanfavours fully autonomous tax system to reduce discretion and discrimination.
He said the VAT collection would be the major focus of the tax department using technology.
DrMashiurRahman suggested forming a high-powered body to look into the tax reform system.
DrAhsan H Mansur, executive director of the Policy Research Institute (PRI) said sustainable reform is absent in the tax department.
He suggested separation of the tax policy unit from the tax administration and a unique tax registration number for taxpayers combining income tax, VAT and customs wings.
He recommended a major shake-up in the tax system to bring reform.
Syed NasimManzur, managing director of the Apex Footwear, said it is important to look into how revenue is raised, not only how much revenue is raised.
Theoretically the government's tax to GDP ratio should rise with the rising GDP, but in Bangladesh, it is not happening, he said.
India and Nepal have revenue to GDP ratio of 15.8 per cent and 19.6 per cent respectively, while it is 8.7 per cent in Bangladesh, he said.
In her presentation, NihadKabir suggested forming semi-autonomous revenue authorities, formation of a tax ombudsman and ensuring private sector representation in non-executive revenue governance bodies.
She suggested data mining, collecting third party information for efficient revenue forecast.
She said taxpayers should be treated as client, not as subject.
MsKabir said tax collection should not be only revenue target-oriented exercise, rather conducting in-depth research is necessary.
MahtabUddin Ahmed, CEO of Robi, said honest taxpayers and multinational companies are being harassed while such practice is working as incentives for tax evaders.
Terming this a 'trap', he said the taxmen look for tax collection sources on the short-term basis and there is a lack of coordination at the top level.
Former National Board of Revenue (NBR) chairman DrNasirUddin said non-cooperation from the insiders sometimes hinder the reform activities.
AbulKasem Khan, chairperson of BUILD said the taxpayers are unduly audited in many times and small and micro businesses face problem for the existing audit system.
He suggested the use of technology in filing tax returns, tax payment, and audit to simplify the system.