The National Board of Revenue (NBR) will be tasked to increase the number of registered income tax payers to 1 crore by the next financial year to give a fresh boost in internal resource mobilization.
The next budget is likely to unveil policies to net the additional tax payers, officials familiar with budget preparation said.
Finance Minister AHM Mustafa Kamal is expected to announce the policies through his maiden budget speech in the parliament on June 13. According to National Board of Revenue (NBR) data, as of June 2018, there are about 35 lakh tax identification number (TIN) holders, of which about 19.5 lakh submitted tax returns.
“The government has set the target to increase the number of registered taxpayers to 1 crore by the next fiscal year, as direct tax remains the biggest source of its revenue income,” an anonymous finance ministry official told the New Nation on Sunday.
The government earlier set Tk 102,201 crore income tax collection target for NBR in this financial year (2018-19)
Citing a study, the finance ministry official said that there are about 4.0 crore people are eligible to pay income tax. But the number of taxpayers is hovering between 15 and 20 lakh only leading to a poor tax-GDP ratio.
“If we can bring the additional people under the tax net then it will help improve the tax-GDP ratio,” he added.
He also said that the government will adopts measures to improve capacity of the tax administration so that it can net the additional taxpayers.
Bangladesh has one of the lowest tax-to-GDP ratios in the region. In fiscal 2017-18, the tax-to-GDP ratio was 9.27 percent, which is far below the developing country average.
Rampant tax evasion is believed to be the prime cause of the poor tax-GDP ratio.
However, the seventh five-year plan has a target to raise the tax-to-GDP to 16.1 per cent in 2020.
Sources said that the tax administration has aimed to identify about 40 lakh potential taxpayers in Dhaka and another 20 lakh from divisional and district towns to reach the 1 crore tax payers’ target.
“We have already chalked out a detail plan to net the additional tax payers,” said a NBR official.
He said that additional manpower will be engaged in temporary basis to collect information of potential taxpayers in Dhaka and other metropolitan cities, district towns and upazilas.
“Survey will be conducted in Dhaka’s posh areas to bring the house and flat owners under the tax net.”
Furthermore, the revenue board will set up offices at upazila levels to expand the tax net.
