80pc private cos tax defaulters: NBR
July 16, 2011
Over 80 percent private companies do not pay taxes showing ‘losses’, says the chairman of the National Board of Revenue (NBR).
Economy to get hurt
June 12, 2011
Leaders of the chambers and trade bodies yesterday urged the main opposition BNP to withdraw hartal and solve political problems in parliament saying strikes badly hurt the economy.
Economy heads back to high growth
May 21, 2011
Bangladesh is expected to head back to more than 6 percent economic growth this fiscal year, after a two-year spell of slowdown due to global recession and dipping exports, according to predictions of World Bank (WB) and Asian Development Bank (ADB).
Inflation to affect economic stability
April 7, 2011
The Asian Development Bank (ADB) cautioned yesterday higher inflation could affect Bangladesh’s macroeconomic stability.
Interest rate hike worries FBCCI
April 3, 2011
The Federation of Bangladesh Chambers’ of Commerce and Industry (FBCCI) on Saturday said a stalemate is looming large in the country’s trade and commerce sector due to the ongoing liquidity crisis – a negative financial situation characterised by lack of cash flow. “The supply-side shortage of cash has triggered three-dimensional problems such as increase in the rates of interest for credit, higher margin of payment for opening L/C (Letters of Credit) and foreign currency shortfall,” the FBCCI said in a statement.
Tax evasion in FY ‘10 Tk 210b: TIB study
March 31, 2011
An amount of Tk 210 billion in taxes were “evaded” or “defalcated” in fiscal 2009-10 which was 2.8 per cent of the country’s national income and one-third of tax revenues collected during the year, Transparency International, Bangladesh (TIB) said Wednesday.
The TIB, in its research findings noted, the National Board of Revenue (NBR) could have collected 34 per cent more revenues than what it did in fiscal 2009-10 if it realised the above-noted ‘tax-evaded’ or ‘defalcated’ amount of money.
The TIB study also identified that tax-gross domestic product (GDP) ratio increased by only 6.5 per cent in the last 35 years as the government gave less priority to increasing tax revenue-collections.
It recommended to the NBR to ensure efficiency, transparency and accountability in the revenue board to help boost tax collection.
The TIB listed a set of recommendations and unveiled key findings of its study on tax collections by NBR in a roundtable, at city’s CIRDAP auditorium.
The findings of the research titled, “The National Board of Revenue: Challenges in transparency and accountability and its way out”, were presented at the roundtable.
Former advisers to the caretaker government Mirza Azizul Islam and Akbar Ali Khan, former NBR chairman Badiur Rahman, NBR members Aminur Rahman and Farid Uddin attended the roundtable.
TIB researchers M Zakir Hussain and Nina Samsunnahar conducted the study on a sampling method. The research team collected data from 713 people and 50 businessmen.
TIB trustee board chairman M Hafizuddin Khan chaired the roundtable discussion.
The team conducted the research from April 2007 to February 2011.
TIB said existing tax structure puts much pressure on low income people due to high rates of indirect tax.
In the study report, the TIB identified tax evasion as a major reason for the country’s poor tax-GDP ratio.
Referring to the 2010 national household survey, the TIB report said 62 percent of the taxpayers identification number (TIN)-holders faced harassment and corruption at the time of tax assessment and registration.
The TIB said taxpayers have to spend Tk 3500 on an average for bribing the tax officials for tax assessment and faced harassment on getting tax rebate.
Around 72 per cent of the imported consignments involve payment of bribe for obtaining their clearance from the port.
The TIB study also identified concealment of information by customs officials on numbers and the nature of cargoes, false statements on country-of-origin and underinvoicing, by bribing tax officials.
The report also focused on roadblocks of the NBR to expediting efforts for increasing revenue growth.
“The NBR failed to appoint any officials in 1984 to 2009 period although revenue collection increased 10 times in 1990-2010,” the report said.
On an average, a VAT inspector has to maintain 10,000 records of businesses while a deputy commissioner of taxes (DCT) has to check 15,000 files annually.
The report also identified irregularities in approval of incentives and rewards.
It recommended to the government to fix the tenure or NBR chairman for, at least, three years.
The TIB study identified several reasons for tax avoidance by potential taxpayers.
The reasons included, among others, lack of confidence in government machining about making proper use of the collected amount of taxes, poor public services in areas of citizens’ benefits falling much short of people’s expectations, complicated tax collection system, underhand dealings between taxpayers and taxmen, non-enforcement of measures relating to appropriate punishment for tax evasion, introduction of automation and e-governance at a snail’s space, and non-coordination between different departments of NBR.
The TIB estimated that an amount of Tk 90.00 billion in black money was whitened between 1976 and 2006. The scheme for whitening black many neither helped the NBR to collect higher amount of revenues nor was morally acceptable, it noted.
The TIB recommended for withdrawal of this scheme, while calling for mandatory provision for all financial transactions being routed through banking channel and public disclosure of wealth statements of the policymakers.
For resolving complexities in tax appeal process, the TIB report suggested for appointment of judges, income tax lawyers and Chartered Accountants as members of appellate tribunals.
The TIB report strongly criticised the repeal of the Tax Ombudsman’s Act, without making any efforts for reforming its office. The move will fuel corruption and irregularities in tax administration, it feared.
The TIB study also strongly pleaded for full automation of tax collection system and facilitating e-governance.
The TIB research team has collected data from salaried persons, individuals and corporate bodies, professionals, food shops, small and medium enterprises (SMEs) and clearing and forwarding agents.
The National Board of Revenue (NBR), however, disagreed with the findings of TIB, saying that the research has highlighted systemic problems only and its recommendation would hardly bring any positive impact on reforming the revenue board.
The board also opposed the method of estimates about Tk 210 billion as being the amount of tax evasion or defalcation in fiscal 2009-10 tax evasion.
“I have doubts about the amount. The TIB hasn’t clarified whether it is tax gap that could be collected from potential taxpayers or tax evasion,” said NBR member (customs and VAT administration) Farid Uddin.
He, however, admitted that there were distortions in the tax system and also lack of skill and capacities of taxmen. He said the existing VAT law is nothing but an ‘excise law’ caused by distortion.
The NBR members made these comments at a roundtable, centring the unveiling of a research by TIB report on NBR.
“Still, the country is collecting 39 per cent revenue at the customs points. But manpower strength is very poor there. The NBR has appointed PSI (pre-shipment inspection) companies for this reason, but they have failed to perform well,” the NBR member said.
The NBR could not appoint officials for the last 26 years due to different court cases, he added.
The current requirement of manpower is 4000 at the customs points, but there are only 1200 officials working there, he said venting his frustration also on their educational qualification and age.
“Most of the officials promoted from the field-level positions are under-graduates or aged over 55,” he said.
The NBR needs educated and young officials to help boost revenue collection, he added.
“We have overcome the roadblocks in recruitment. Within a few months, the board will be able to recruit 600 officials,” he said.
The NBR member said the revenue board has moved to digitise all of its services to resolve the existing allegations about people’s harassment.
NBR member (income tax policy) Aminur Rahman said: “Other countries calculate provincial tax along with central tax revenue, but we do not follow this. It could be a reason for poor tax-GDP ratio of the country.”
He said the NBR has been forced to allow tax exemptions on different grounds including reining in of prices of essential food items.
Japanese investors urged to expand business ties with Pakistan
February 23, 2011
Seeking cooperation of Japanese investors to explore enormous possibilities of strengthening and expanding business relations with Pakistan, President Asif Ali Zardari Tuesday invited the Japanese business community to rejuvenate Pakistan’s economy through their individual contribution, joint venture or consortia and help Pakistan.
Confusion over fixation of soyabean oil price
February 19, 2011
National Price Fixation andMonitoring Committee has suggest the government to fix the mill gate price of per litre soybean oil (loose) at Tk 100.32, which is lower by Tk 15.68 than the price proposed by Oil Refiners’ Association.
Margin loan ratio not followed: investors
January 12, 2011
Share market investors have demonstrated in front of brokerage houses alleging that the banks are not following the new margin loan ratio of 1: 2. Read more
DSE posts 15pc record rise
January 11, 2011
Dhaka stocks set a new record with a 1012-point rise, climbing over 15 percent, a day after a record fall of 660 points.
The DSE general index gained 1012.65 points or 15.58 percent to close at 7512.09 on Tuesday. Read more