Tax file assessment: Discretion, not rules, becomes norm

People are subjected to discrimination during assessment of their tax files due to the absence of a central guideline from the National Board of Revenue, or NBR.

The intervention by tax commissioners and high-ups in tax offices causes inordinate delay and raises expenditures in the disposal of tax files, victims and tax lawyers said.

Taxpayers are not being treated equally due to the lack of a uniform guideline, they said.

According to the Income Tax Ordinance-1984, deputy commissioners of taxes are empowered to assess tax files while determining taxes.

Contrary to the norm, each of the 31 income tax zones has been following their respective administrative orders while assessing tax files.

The orders have authorised joint commissioners, additional commissioners and tax commissioners to get involved in tax files assessment on the basis of specific limit of taxpayers' income.

Paradoxically, the income tax law allows deputy commissioners to follow orders of their supervisors. On the basis of the provision, some tax commissioners are getting involved in tax files assessment process, tax practitioners said.

As the allegation has surfaced, the revenue board has attempted to curtail the intervention of tax commissioners in the assessment of income tax files.

In response to the allegations of taxpayers, the income tax wing has recently taken a step to examine the differences between tax claim and the actual payable amount after the intervention of tax commissioners in assessment process.

The tax inspection and training section of the income tax wing has recently sent a letter to the commissioners across the country to furnish the details between July 01, 2018 and December 31, 2019.

The letter, signed by first secretary Khandaker Khurshid Kamal, has sought the information of draft tax assessment approval.

The information includes name of taxpayers, electronic TIN, tax year, payable tax as per draft tax assessment paper, differences between payable taxes after approval of the commissioners and the actual amount.

A senior official of the income tax wing said that there were widespread allegations from taxpayers as well as lawyers of harassment and delay in file disposal due to intervention of high-ups.

He referred to the law, saying none other than a deputy commissioner is empowered to assess tax files to determine taxes.

The official said taxpayers alleged they needed to grease the palms of senior officials to get the tax clearance certificate.

The amount of bribe often goes up when high-ups get involved in the assessment process, he said.

A field level tax official defended the involvement of seniors, saying quality of tax file assessment will suffer unless the high-ups oversee the assessment process.

The government would lose substantial amount of revenue without the supervision, because deputy commissioners are junior-level officers and less experienced in tax file assessment, he said.

He said most of the recommendations for the assessment of tax files came from additional commissioners or joint commissioners and tax claim hardly increased after their intervention.

In some cases, the supervision becomes imperative while handling complex files.

That said, he argued that forced interference by tax commissioners should be stopped to reduce harassment.

Md Nooruzzaman, researcher of the Business Initiative Leading Development (BUILD) said tax commissioners are exercising their discretionary power.

The taxmen are not following the relevant section of the income tax ordinance and insist taxpayers are not complying with rules while submitting tax files, he said.

"We have suggested on unclear audit process of income tax files. Audit process needs one year time as tax file moves from assistant commissioner to commissioner level and reverse against to get disposed," he said.

BUILD suggested disposing tax files with tax implication up to Tk 2.0 million, he said.

"The involvement of tax commissioners could be allowed on the basis of merit and sensitivity of tax files," he said.

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