Dil Afrose Duetee :
In FY 2019-20 considering the responses and initiatives to fight ‘COVID-19’ pandemic Government has set priority areas of different sectors and allocation of resources. Government’s development priorities continue towards providing fiscal stimulus to overcome the losses caused by ‘COVID-19’. In the FY 2019-20 revised budget, allocation has been increased or additional allocation has been made to the sectors which have been directly involved with the response to ‘COVID-19’ such as health, agriculture, social welfare, food, disaster management, employment generation etc. Allocation to these sectors on priority basis will be continued in the FY 2020-21.
A simple one-page return of income namely IT 11 KHA 2020 has been introduced to facilitate return submission of the marginal taxpayers. TIN registration and submission of return of income have been made a mandatory provision for individuals and organizations receiving income from shared economic activities. TIN registration and submission of return of income have been made a mandatory provision for individuals owning a licensed weapon, and/or taking part in Zilla Parishad election. With a few exceptions, filing of return of income has been made a mandatory provision for all individuals and entities legally bound to register for a TIN.
With a view to expanding tax net on digital economy, provision for tax deduction at source has been introduced at the time of paying bills for receivers of service through sharing economic platform including ride sharing, co-working, space providing and accommodation providing service. Section 52Q of the Income Tax Ordinance, 1984 has been rewritten to include the taxable income remitted to Bangladesh on shared economic activities and digital advertisement under the purview of source tax deduction.
Like other similar cases, tax at the applicable rate has been collected at source on commission received by Bangladesh Telecommunication Regulatory Commission (BTRC) on international phone calls. Rate of tax to be collected at source on compensation against acquisition of any immovable property within the jurisdiction of any city corporation, pourashava or cantonment board has been raised to 6 per cent, and rate of tax to be collected at source on compensation against acquisition of any immovable property outside the jurisdiction of any city corporation, pourashava or cantonment board has been raised to 3 per cent.
Against the backdrop of global crisis emanating from the outbreak of the Corona virus, a special provision, stipulating payment of tax at the rate of 10 per cent and retaining the investment for a minimum period of one year, has been inserted with regard to investment in the stock market within this fiscal to ensue increased fund flows in the stock market as well as to make it more thriving and functional. No other authority in Bangladesh will raise any question regarding the source of such investment.
With a view to ensuring long-term flow of fund in the bond and stock market, facilitating transaction of bond and sukuk, as well as letting the bond and stock market grow in a sustainable way, provision for tax deduction at source has been made on each transaction made in these markets at a rate fixed by the Bangladesh Stock Exchange Commission in place of deducting tax at source on the total value of transaction.
In order to smoothen the ongoing developmental journey of Bangladesh and to maintain the growth in employment and investment, seven new industrial sectors, in addition to the existing ones, and depending on geographical location, have been granted tax holiday facility at a regressive rate for different terms.
Allowable expense on foreign travels for companies has been reduced to 0.50 per cent of the annual turnover in place of the previous rate of 1.25 per cent. Previously there was no ceiling for claiming promotional expense by businesses, which resulted in claiming of staggering sums as promotional expenses under the heads mostly unrelated to the operation of businesses. Hence a ceiling for claiming promotional expense has been fixed at 0.50 per cent of the reported annual turnover.
Necessary amendments have been brought in Section 80 of the Income Tax Ordinance, 1984 with regard to raising the ceiling of gross value of assets in possession of any individual taxpayer from Tk. 25, 00,000 to Tk. 40, 00,000 for making him legally obliged to submit a wealth statement. Also, the ceiling of income for any individual taxpayer has been raised from Tk. 3,00,000 lac to Tk. 4, 00,000 in order to make him liable to submit the lifestyle expenditure statement with a return of income.
A new Section 184G has been inserted into the Income Tax Ordinance, 1984 which entitles National Board of Revenue to extend the time limit stipulated in the Ordinance in carrying out functions under certain sections, to granting condo nation or to exclude something from the business process in the face of any natural calamity, pandemic, emergency situation and an Act of God.
The Value Added Tax Act and its rules have been simplified to facilitate for Automated & Transparent Environment. Online VAT registration, online return submission and online e-payment systems have already been implemented. Use of Electronic Fiscal Device (EFD)/Sales Data Controller (SDC) for some business entities has been made mandatory. Installation of EFD/SDC has already been started. NBR approved software use has been made mandatory for companies with annual turnover of more than Tk 5 crore.
Finally, can taxation be a catalyst for governance and state-building in developing countries? Usually, taxation is seen as a means for raising revenue to finance governmental expenditure. It also serves as a powerful tool for economic stabilization and distribution of income and wealth within a society. Yet another equally important but often overlooked function of taxation is state-building and representation.
(The writer is a development activist).
