Badrul Ahsan :
A new income tax law in the offing, highlighting digitisation of the country’s income tax system, according to tax administration officials.
Emerging issues and new business dimensions like merger and acquisition, transfer pricing, money laundering and base erosion and profit shifting will be in focus in the law.
Emerging international taxation issues, including money laundering and profit shifting, and reducing corporate tax rates will also get attention.
The National Board of Revenue (NBR) will unveil the draft of the Income Tax Act this month or in the next month for stakeholders’ opinion.
The drafting committee had already finalised the structure of the law, which is likely to be placed in parliament shortly.
“Formulation of a new law is time-befitting, as base erosion and profit shifting refer to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations,” a high official of NBR told The New Nation on Monday, preferring anonymity.
The new law will be in Bengali language with an official English version, said the senior official.
He said the revenue board is also set to hire two external experts, one for international taxation and the for drafting the law in Bengali.
‘There will be no major changes in the basic structure of the existing Income Tax Ordinance-1984 and more or less 80 per cent of the provisions will remain in place in the new law,’ he further said.
The NBR also cannot reduce the tax rates, particularly corporate one, due to the existing weaknesses in the tax system, he added.
Under the existing law, the tax administration can allow tax exemption to any one through issuing statutory regulatory order which is the main hindrance to reduction of the tax rates as tax exemption increases burden on regular taxpayers, officials said.
The method of allowing tax exemption will be modified in the new law and the NBR may scrap its authority to give exemption through issuing SROs, they said.
Tax exemption will be given after the approval of the parliament, they hinted.
Earlier in March, the revenue board sought opinion from stakeholders about the structure, philosophy and text of the new law in a bid to prepare the draft.
The draft committee is now working on framing the draft within this month and make the draft available by next month, a committee member recently told The New Nation.
Income tax wing of the NBR has also made major changes in some areas through finance acts in the last three years, he said.
He said the existing income tax returns submission system will also remain unchanged.
Earlier in 2013, the International Finance Corporation prepared a draft Income Tax code, containing income tax law, gift tax law and wealth tax law, for Bangladesh but the NBR scraped the code finding it too complex in the present perspective.
A new income tax law in the offing, highlighting digitisation of the country’s income tax system, according to tax administration officials.
Emerging issues and new business dimensions like merger and acquisition, transfer pricing, money laundering and base erosion and profit shifting will be in focus in the law.
Emerging international taxation issues, including money laundering and profit shifting, and reducing corporate tax rates will also get attention.
The National Board of Revenue (NBR) will unveil the draft of the Income Tax Act this month or in the next month for stakeholders’ opinion.
The drafting committee had already finalised the structure of the law, which is likely to be placed in parliament shortly.
“Formulation of a new law is time-befitting, as base erosion and profit shifting refer to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations,” a high official of NBR told The New Nation on Monday, preferring anonymity.
The new law will be in Bengali language with an official English version, said the senior official.
He said the revenue board is also set to hire two external experts, one for international taxation and the for drafting the law in Bengali.
‘There will be no major changes in the basic structure of the existing Income Tax Ordinance-1984 and more or less 80 per cent of the provisions will remain in place in the new law,’ he further said.
The NBR also cannot reduce the tax rates, particularly corporate one, due to the existing weaknesses in the tax system, he added.
Under the existing law, the tax administration can allow tax exemption to any one through issuing statutory regulatory order which is the main hindrance to reduction of the tax rates as tax exemption increases burden on regular taxpayers, officials said.
The method of allowing tax exemption will be modified in the new law and the NBR may scrap its authority to give exemption through issuing SROs, they said.
Tax exemption will be given after the approval of the parliament, they hinted.
Earlier in March, the revenue board sought opinion from stakeholders about the structure, philosophy and text of the new law in a bid to prepare the draft.
The draft committee is now working on framing the draft within this month and make the draft available by next month, a committee member recently told The New Nation.
Income tax wing of the NBR has also made major changes in some areas through finance acts in the last three years, he said.
He said the existing income tax returns submission system will also remain unchanged.
Earlier in 2013, the International Finance Corporation prepared a draft Income Tax code, containing income tax law, gift tax law and wealth tax law, for Bangladesh but the NBR scraped the code finding it too complex in the present perspective.
