Ideally, paying income tax by the citizens should always be swift and easier. Difficulty in submitting tax returns means the lesser number of taxpayers. But contrary to the expectation, the Finance Bill 2022 has incorporated some measures including IT compliance that can create panic among the small taxpayers. These measures may ultimately depress them as well.
The Finance Bill 2022 says that taxpayers must submit the tax returns for availing about 50 services, including continuation of bank transactions, utility connections, and cap on cash transaction for companies up to Tk1.2 million, unchanged tax-free limit for individual taxpayers. The budget has proposed this measure ignoring the present inflationary pressure on common people and downward revision of tax credit for middle-income people.
Tax experts have rightly said that if the proposed measures approved in the Finance Act 2022, millions of new taxpayers would be compelled to submit tax returns in the upcoming fiscal year. Such an aggressive move can indeed hurt the marginal taxpayers. Before, only submission of tax identification number (TIN) was mandatory for availing those services. Now why create this rush when the country is facing a dire economic condition as fallout of the Covid-19 pandemic and Russia-Ukraine war?
Against the present hard times of the economy, therefore, a go-slow policy to earn revenue would have been friendly for the taxpayers, particularly those who are at the lower end. According to the proposed fiscal measure, a total of 85 million interest-bearing bank depositors would now need to pay tax-return slip every year. By enforcement of this new measure, the people who did not show their assets would be compelled to submit tax returns this year. But the government should have judiciously offered amnesty for them for their previous income or assets.
Due to worldwide inflation, the threshold for income-tax ceiling for individual taxpayers should be raised to Tk350,000 instead of keeping the tax-free ceiling to the previous Tk300,000. Obviously, there is a need here for an adjustment. Therefore, before passing the Finance Bill 2022, it should be revised and make tax payment by the citizens a friendly and encouraging experience. Taking an aggressive approach to collect more revenue at a time when most people are virtually struggling to survive is not the right thing to do. The people need financial help to come out of the economic crisis prevailing as well extortion by organised groups, pervasive corruption notwithstanding.
