Al Amin :
The country is losing over one lakh crore of taka per year for evasion of revenue. The evasion is taking place due to corruption, inefficiency, administrative and legal weakness as well as lack of automation of the National Board of Revenue (NBR).
Dishonest taxpayers and multinational companies are mainly evading the huge amount of revenue by hiding income and showing low prices of imported goods.
Analysts blame the incompetence and corrupted NBR officials as well as the outdated tax collection system in the country for the revenue evasion.
People buy land, flats, cars and savings certificates by evading taxes. Most of them do not show these income or assets in their income tax returns. Even, a large part of their legal income is being hided up when they file tax returns.
Syed Aminul Kabir, former member (income tax) of the NBR, told The New Nation, “The revenue worth around Tk 70,000-100,000 crore is not being collected every year due to various reasons.”
“Imposing high rate of tax, lack of proper reformation of tax administration, manpower crisis and lack of digitalization are the main reasons behind the revenue evasion,” he added.
“For an example, rate of corporate tax in Bangladesh is 32 per cent whereas in Singapore 24.5 per cent and in USA only 21 per cent. Similarly in Bangladesh manufacturers are paying 15 per cent VAT which is 8-9 per cent in USA and 5-7 per cent in Malaysia. As a result, the people are discouraging to pay the taxes,” he added.
Dr Iftekharuzzaman, Executive Director of Transparency International Bangladesh, however, said, “Inefficiency of the revenue collectors (NBR) is mainly responsible for the unpaid revenue.”
“Besides, the revenue collection system in Bangladesh discourages people in paying tax. As a result, the amount of revenue evasion is increasing day by day,” he added. NBR officials said tax authorities plan to audit foreign companies’ transactions with their associated entities abroad from next year in order to reduce the scope for illicit fund transfer and tax evasion.
“We will start auditing cases that will be deemed high risk in terms of revenue losses,” said the official of the NBR.
The NBR has reconstituted its Transfer Pricing Cell to bolster its operations to monitor international transactions by foreign companies in line with a law framed in 2012.
An NBR survey has found that 921 foreign companies, including multinationals, carry out transactions with their associated entities overseas to buy goods and services, said the official. Of them, 100-120 companies have been reporting international transactions for the last several years.
Dr Nashid Rizwan, Additional Commissioner (Tax Zone-4), said, “There is no own policing service in the income tax. Besides, the NBR does not have the efficient manpower which is required to investigate any matter properly.”
