A former chief of National Board of Revenue (NBR) said on Wednesday that the government must pursue a pro-people policy with organisational and procedural reforms in the revenue administration for bringing buoyancy in tax collection from the individual taxpayers and expanding tax base.
He said, apart from this, “The government needs to initiate steps to improve operational efficiency in the tax administration and reduce graft in the whole system to get a positive response from the taxpayers”
There is no denying there have been improvements in revenue collection by the officials in recent years with more people becoming tax-complaint. But a sizeable section of the population still continues to be tax-shy mainly due mainly to absence of a friendly environment and old-age complexity in the tax administration, he added.
“People remain tax-shy because of existing procedural complexity in the system. They are also reportedly facing harassment by taxmen to comply under the complicated system,” former NBR chairman Dr. Muhammad Abdul Mazid told The New Nation yesterday.
He said: “As under the current system, the NBR does not help mobilizing expected revenues from the individual tax-payers, it should pursue a policy in which majority of the people can eventually pay taxes without any hassle. Under the system, the NBR should remove the existing bottleneck, offer better governance and services and create a pro-people tax administration.”
Side by side, it should also enhance enforcement, monitoring and operational efficiency with technological and manpower up-gradation to increase tax collection and to combat evasion and fraud, he added. “I believe that once a friendly-environment is created in the revenue administration and the tax payments are made simple and hassle-free, people will pay income tax freely. Such reforms will not only have significant impact on the productivity of overall tax system but also will increase the Tax-GDP (Gross Domestic Product) ratio,” he noted.
When asked, he said, the people are not interested in paying tax due to increasing trust deficit between the revenue board and taxpayers, and so incidence of avoidance and evasion is on the rise.
The Ex-NBR chief, however, suggested that the revenue board should take mass awareness programmes, motivational campaign and engage in social contracts on developing a culture of paying taxes and encourage the taxpayers.
Expressing his dismay over the country’s poor Tax-GDP ratio, the former NBR chief said, income tax is one of the major components of tax revenue in all the countries. But, Bangladesh has one of the lowest Tax-GDP ratios in the region.
“Raising Tax-GDP ratio from the current dismal level of 10-11 per cent of GDP to 13-14 per cent of GDP under the Sixth Five Year Plan (SFYP) will be challenging unless all the people with taxable income feel comfortable to pay tax,” he said.
So, the government should focus to devise a long-term plan to increase income tax revenue by netting the untaxed people and later it will help the government to meet its rising development spending and improve quality of public services.
Dr. Muhammad Abdul Mazid who is now serving as the chairman of Chittagong Stock Exchange (CSE) said, since revenue is the most sustainable means of financing development activities, Bangladesh must have the goal of achieving self-sufficiency through tax revenues and reduction of its excessive reliance on foreign aid.
Considering this, he urged the taxpayers to build partnership with the revenue board for honestly paying taxes. It will later contribute to the socio-economic development of the country.
