Invoice manipulation: Lack of joint efforts by govt, banks blamed

A lack of concerted efforts from both the government and banks continues to pose obstacles to combating under-invoicing and over-invoicing in imports and exports in Bangladesh, said chief of National Board of Revenue (NBR) Abdur Rahman Khan on Saturday.

It is easy to check international prices of goods and banks can do it easily before allowing the opening of Letters of Credits (L/C), he said. "If goods are not imported or exported at actual prices, compliant institutions and genuine taxpayers are harmed."

While speaking as the chief guest at a shadow parliament session organised by the Debate for Democracy (DfD), the NBR chairman also acknowledged the government's shortcomings at the customs level.

Chairman of the DfD Hassan Ahmed Chowdhury Kiron chaired the programme held at the Bangladesh Film Development Corporation (FDC).

Mr Rahman, FCMA, further said, "Thanks to the government's political commitment, it is becoming easier to make decisions that promote good governance in the tax administration."

"More tax exemptions are granted than the amount of actual tax collected. We have taken initiatives to amend the tax laws. With these changes, the government will no longer be able to provide tax exemptions at will. Only Parliament, through the Finance Bill, may consider tax exemptions in the national interest," he said.

Mr. Khan also admitted that corruption is a major obstacle to the tax system. "There is no formal tax education in Bangladesh; only a few tax-related topics are included in higher education curricula," the NBR chief said. "Considering its importance, tax education should be incorporated into the primary, secondary, and tertiary levels."

In his speech, Mr Kiron said, "It was a wise move by the protesters to halt their protests regarding the dissolution of the NBR and the proposed separation of tax policy and tax administration."

"However, if revenue department officials and employees have legitimate demands, I hope the government will take them into consideration." He noted that with collective efforts, splitting the NBR into tax policy and administration departments may yield positive results. He recommended shunning the  path of excessive punitive measures and administrative pressure in tax administration that may lead to frustration, reluctance in duty, and a lack of confidence among officials, ultimately hindering tax collection.

Mr. Kiron also alleged a thriving business around income tax file audits where some clerks, computer operators, tax office staff, and certain income tax lawyers use the threat of audit to trap taxpayers into bribery schemes. "Fear drives taxpayers into these traps," he said.

He placed a seven-point proposal, including expansion of the tax net, simplifying and automating tax collection system, addressing the concerns of Income Tax and Customs & VAT cadres regarding the division of NBR, providing a clear understanding of the proposed reforms for all stakeholders, ensuring that reforms do not obstruct the promotion of Income Tax and Customs & VAT cadre officials, eliminating case-by-case tax exemptions, and taking steps to ensure real pricing in imports to prevent duty evasion through under-invoicing.

Green University of Bangladesh defeated the debaters from Chattogram Maa-O-Shishu Hospital Medical College at the session on "Expected revenue collection is possible through reform in tax administration". The judges include Professor Abu Muhammad Rais, Dr. Shakila Jesmin, journalist Mainul Alam, journalist Doulot Akter Mala, and journalist Abul Kashem. At the end of the event, participating teams were awarded trophies, crests, and certificates.

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