Income tax collections are more like adornment to the country's taxation regime due to the low returns generated. GDP-tax ratios are one of the lowest in the sub-continent and though we hear of ambitious numbers - the latest being bandied is roughly two million submissions currently. That leaves 1.8 million with e-TIN numbers and no submissions leading the National Board of Revenue (NBR) to think of field-level adjudication of either minimum tax or a percentage increment on previous year's tax.
It's absurd to think a country of 180 million only has 3.8 million able to pay tax, and that's where the taxman has failed big time. But the 1.8 million absconders will take some finding because as reports have it they can't be traced. In a way that is a surprise. Most of these taxpayers have abilities to buy cars and motor cycles and are therefore quite traceable from Bangladesh Road Transport Authority data bases. Even a motor cycle costs close to Tk 100 million (one lakh) and that comes either from a bank loan or spare cash. The same numbers must be paying VAT on various end products using plastic or cash. In case of plastic they can be traced. But as always, it is the reluctance to chase dodgers outside the metropolitan areas that remains a puzzle. Parliament isn't setting an example either with most of the 350 members not making public their tax statements nor are the ones submitted matched with the fiscal returns submitted in wealth and assets at the time of submitting nomination papers.
Instead NBR field force amuse themselves by probing deeper into the returns of those who pay some form of tax in any case. It's as if those who pay up must be hiding money whereas those not paying get off scot-free.
There are small businesses that are sustaining well and thereby can pay at least a flat form of tax. The method was tried some years ago but fell spectacularly flat when even shops at Baitul Mukarram declared they were all running at a loss. All such establishments are paying their municipal and where appropriate, rental dues. So why not tax?
One aspect that can't be ignored is the double taxation i.e service charges that are forced on taxpayer. Municipal taxes include garbage collection but almost all residential areas charge a scavenger fee to carry garbage from doorstep to the nearest collection point. The same is true for shops and establishments. The Municipality doesn't charge extra for cleaning the main roads and clearing the left refuse of the countless street vendors. How fair is that?
One factor that has been a good incentive is suspending salaries unless income tax is paid. It falls under the purview of an advance income tax of sorts but, as always, is difficult to adjust at the final filing.
There are ways and there are loopholes but unless tax payment is made simpler and is less of a witch-hunting exercise, taxpayer numbers won't go up.
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