Govt asked to up taxes on imported steel
November 19, 2008
Leaders of the associations of steel mills, re-rolling mills and ship-breakers have urged authorities to duty and VAT on imported rods to protect the local steel industry. The leaders also demanded reduction of import tax on chemical products used in the steel industry from seven to three percent,
Govt wants more income tax to achieve autarky : 316 taxpayers honoured on Nat’l Tax Day
September 17, 2008
‘There is no alternative to mobilising domestic resources and accordingly collection of income tax should be increased,’ he said speaking at a reception given to 316 taxpayers at the Bangladesh-China Friendship Conference Centre in the city on Monday.
The National Board of Revenue organised the function to honour the taxpayers who fell in its ‘long-term taxpayer’ and ‘highest taxpayer’ categories on the occasion of National Income Tax Day, the first of its kind to encourage people to pay tax.
The board also brought out a colourful rally in the city. NBR chairman Abdul Mazid inaugurated the rally participated by officials and employees of the board.
‘We have to decide now or never whether our next generation will live on loan and aid or stand on their own foot. If we opt for the second, we have no other way but to pay our taxes in due time and at due rates,’ the NBR chairman told the reception.
‘We have to lay emphasis on income tax collection as this is not only a main source of revenue collection but also a weapon for ensuring social justice,’ the finance adviser said, admitting that the government could not take proper initiatives for collecting adequate revenue from the internal resources.
Mirza Azizul Islam however mentioned that the government had taken certain steps to make tax payment easier and smoother for taxpayers’ convenience.
The steps are: simplification of the income-tax return system, introducing universal self-assessment system, cutback on the company tax rate and discretionary powers of tax officials, and training of NBR officials on automation system.
Certificates and crests were handed over to 12 taxpayers - six from each of the two categories.
The six taxpayers in the long-term category who received the tokens of honour are Sayedur Rahim from Dhaka division, Samson H Chowdhury from Rajshahi division, Mohammad Neamat Ullah from Chittagong, Khandokar Sakhawat Hossain from Khulna, Abdul Hamid Miah from Sylhet and Akhteruzzaman from Barisal division.
The six highest taxpayers are Rahim Uddin Bharasha from Rajshahi division, Mohammad Yunus Ali from Dhaka, Mohammad Jalal Uddin from Sylhet, Kazi Mozaharul Huq from Khulna, Mashiur Rahman Chowdhury from Chittagong, and Manirul Islam Talukder from Barisal division.
Government wants more income tax to achieve autarky
September 16, 2008
The country will have to rely on income tax for meeting public expenses in the wake of gradual decline in the share of customs duty in the government’s revenue earning, said the finance adviser, AB Mirza Azizul Islam.
‘There is no alternative to mobilising domestic resources and accordingly collection of income tax should be increased,’ he said speaking at a reception given to 316 taxpayers at the Bangladesh-China Friendship Conference Centre in Dhaka on Monday.
The National Board of Revenue organised the function to honour the taxpayers who fell in its ‘long-term taxpayer’ and ‘highest taxpayer’ categories on the occasion of National Income Tax Day, the first of its kind to encourage people to pay tax.
The board also brought out a colourful rally in the city. NBR chairman Abdul Majid inaugurated the rally participated by officials and employees of the board.
‘We have to decide now or never whether our next generation will live on loan and aid or stand on their own foot. If we opt for the second, we have no other way but to pay our taxes in due time and at due rates,’ the NBR chairman told the reception.
‘We have to lay emphasis on income tax collection as this is not only a main source of revenue collection but also a weapon for ensuring social justice,’ the finance adviser said, admitting that the government could not take proper initiatives for collecting adequate revenue from the internal resources.
Mirza Azizul Islam however mentioned that the government had taken certain steps to make tax payment easier and smoother for taxpayers’ convenience.
The steps are: simplification of the income-tax return system, introducing universal self-assessment system, cutback on the company tax rate and discretionary powers of tax officials, and training of NBR officials on automation system.
Certificates and crests were handed over to 12 taxpayers — six from each of the two categories.
The six taxpayers in the long-term category who received the tokens of honour are Sayedur Rahm from Dhaka division, Samson H Chowdhury from Rajshahi division, Mohammad Neamat Ullah from Chittagong, Khandokar Sakhawat Hossain from Khulna, Abdul Hamid Miah from Sylhet and Akhteruzzaman from Barisal division.
The six highest taxpayers are Rahim Uddin Bharasha from Rajshahi division, Mohammad Yunus Ali from Dhaka, Mohammad Jalal Uddin from Sylhet, Kazi Mozaharul Huq from Khulna, Mashiur Rahman Chowdhury from Chittagong, and Manirul Islam Talukder from Barisal division.
Source: New Age
‘Deadline for submitting tax returns may be deferred’
September 10, 2008
The National Board of Revenue’s chairman, Abdul Majid, on Tuesday said government might defer the deadline for the submission of income tax returns.
‘Enhancing the time for submitting income tax return is being considered seriously,’ said the NBR chief while addressing a gathering of businessmen in the Dhaka Chambers of Commerce and Industry’s auditorium.
At the gathering, organised to launch the DCCI Tax Guide 2008-2009, businessmen desperately urged him to announce something about extension of the time for submitting income tax returns.
‘But it is a very bad practice as Bengalis are fond of completing any work at the last moment,’ the NBR’s chairman told the audience of businessmen. ‘Delayed collection of revenue disrupts the fiscal activities of the government.’
The time for submitting income tax returns for individuals and enterprises usually ranges between the beginning of July to the end of September. The government last year had also extended the time in response requests from tax-payers.
Replying to a question regarding simplification of bond procedures, the NBR chief said his office had initiated a programme to prepare a bond policy to simplify procedures and prevent abuse of bond facilities.
‘We [NBR] have heard many allegations of the misuse of bond facilities,’ he said.
In this regard Majid said that after automation was completed in the Customs Office in Chittagong, projects are underway to do the same in the Dhaka Customs House and Inland Container Depot to enable the government to scrap the outdated system of pre-shipping inspection before clearance of imports, and for many other reasons.
The DCCI’s president, Hossain Khaled, demanded that the lowest amount of income tax should be reduced to Tk 1,000 from Tk 2,000 since tax is a heavy burden on low-income groups.
He pointed out that introduction of universal self-declaration system in tax assessment, automation in the customs networks and, above all, lessening of harassment of entrepreneurs will help to increase realisation of income tax by the government.
Source: New Age
Freight forwarders want easy remittance system
September 9, 2008
Local freight forwarders have demanded that the government evolve a system that can ensure Bangladesh receives legally the money remitted by foreign freight forwarders to their agents here.
They said the money supposed to be given by the agents of foreign importers would stand at no less than Tk 100 crore a year, which they are being denied due to a complicated process.
The government measures for licensing the freight forwarders, local and foreign, have not been able to remove such complicacies, they have complained.
Freight forwarders assist exporters in shipments and price quotations by advising on freight costs, port charges, consular fees, costs of special documentation, insurance costs and their handling fees.
They also recommend the packing methods that will protect the merchandise in transit. If any exporter desires, freight forwarders can reserve the necessary space on a vessel, aircraft, train, or truck.
In Bangladesh, the sector had earlier been plagued by financial indiscipline, which the government aimed to remove through the new licensing last year.
According to the National Board of Revenue (NBR), the government sought to ensure that the money earned by freight forwarders abroad is returned to Bangladesh.
“If the government does not allow the money in, how the foreign freight forwarders give us our portion?” said Badrul Haque, president of International Freight Forwarders Association of Bangladesh (IFFAB).
A new statutory regulatory order (SRO) suggested the freight forwarders (FFs) bring their charges into the country through the legal channel. But they exchange their service charges in unauthorised ways, an NBR high official said.
Asked about the local FFs’ complaints, NBR Chairman Muhammad Abdul Mazid said the objective of the government move on licensing was to discipline the sector.
The NBR chief hoped that the issue, now being examined, would be settled soon so that Bangladeshi freight forwarders can get their service charges in legal ways.
Around 400 freight forwarders have already received licences from the NBR, but the foreign freight forwarders operating here are yet to get licences due to a row over getting clearance from Bangladesh Bank.
As per the new licensing system, the foreign freight forwarders are required to invest about Tk 1 crore to run their business in Bangladesh. Without the clearance from Bangladesh Bank, the NBR was reluctant to issue licences to foreign companies until recently.
However, on receipt of the US embassy request on relaxation of the terms and conditions in licensing, the NBR has started issuing provisional licences to the companies.
Meanwhile, the International Freight Forwarders Association of Bangladesh (IFFAB) and Association of Cargo Agents Bangladesh (ACAB) have decided to merge into a single umbrella, Bangladesh Freight Forwarders Association (BFFA), and now await the green light from the Ministry of Commerce.
Due to lack of licensing, businessmen previously complained of unnecessary complications and costs in recovering goods from ports.
It was also believed that the non-licensing of the freight forwarders deprived the country of licence fees and value added tax (VAT) on freight charges.
Source: The Daily Star
Tax amnesty has few takers so far
August 20, 2008
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The National Board of Revenue’s amnesty offer to tax dodgers has so far received lukewarm response with only 92 people “legalising” Tk 15.4 crore in the last one and half months, tax officials said. Tax officials say they are expecting a better response in coming months before the end-October deadline.
NBR chairman Mohammad Abdul Majid told bdnews24.com: “Based on our past experiences we can say people rush to take the chance when the deadline nears.”
He hoped that this time would be no exception.
“We gave this opportunity for four months till October 31,” Majid said.
“After the deadline is over the NBR will start a drive against those who did not legalise their undeclared money within the given time. None will be spared; stern action will be taken under existing tax laws against all kinds of tax dodgers.”
In the last one and half months, since the offer began, a total of 92 persons have legalised Tk 15.40 crore in undeclared income, NBR income tax cell member Parsha Begum told bdnews24.com Tuesday.
NBR realised taxes and fines of Tk 3.38 lakh from the amount, she added.
Last fiscal year, 44,449 people legalised or declared Tk 5,213 crore in a similar programme, with the government receiving a total Tk 802 crore.
Last time a 5 per cent extra tax had to be paid with the fixed tax for the tax year in which undeclared money was legalised. This fiscal year it is a 7 per cent fine in addition to the tax.
Finance adviser AB Mirza Azizul Islam proposed a repeat of last year’s tax amnesty in his budget speech on June 9, to be availed from July 1 to Oct 31. The NBR issued the directive in this regard on June 14.
Last year the opportunity was initially given for two months and later extended by another two months up to September 30.
Tax dodgers against whom allegations of tax evasion are already being investigated with legal steps under process cannot in any way take this opportunity.
A government circular also mentioned that the opportunity would not be applicable in case of money earned or invested by dishonest means.
270 sick garments to get tax, loan waiver
August 13, 2008
Progress in this regard was evaluated at a high level meeting at Commerce Ministry yesterday with Commerce Adviser Dr Hossain Zillur Rahman in the chair.
According to the Government decisions the sick industries will also get an opportunity to receive fresh loan and repay the principal amount of their default bank loans with 10 yearly instalments.
Owners of sick garment industries will not have to pay any amount for getting reschedule their default loans, the meeting sources said.
The BGMEA will submit a list specifying 270 garment factories to the Finance Ministry, while the Ministry will issue a separate circular by next two weeks relaxing the conditions of the Cost of Fund Recovery.
Bangladesh Bank will take necessary steps after getting the list of the organisations concerned, while the Commerce Ministry will send letters to the ministries of Finance and Law for disposal of the cases pending with the ‘Artharin’ (financial loan) and ‘Deulia’ (bankruptcy) courts.
The Commerce Ministry will also send letter to the National Board of Revenue (NBR) as per recommendations of the inter-ministerial committee for repayment of debts by instalments and waiver of unrealised income taxes.
The decision was taken at a high level meeting at Commerce Ministry yesterday with Commerce Adviser Dr Hossain Zillur Rahman in the chair.
An official announcement said the decisions were taken considering the important role of readymade garments (RMG) industry in national economy and export trade and in creating employment opportunity.
Additional secretary Golam Mostakim, joint secretary (export) Mostafa Mohiuddin, Export Promotion Bureau (EPB) director general M Khalilur Rahman, BGMEA president Anwar-ul-Alam Chowdhury and officials from the Finance Division, NBR and Bangladesh Bank were present.
While talking to The New Nation, BGMEA president Anwar-ul-Alam said, the steps will help closed garment factories to go to production.
“The garment sector is doing well facing huge internal and external challenges. We want speedy and smooth implementation of the decisions to remove barriers to our export growth.
Bangladesh needs ‘massive changes’ in VAT laws to boost revenues
August 11, 2008
Bangladesh should make ‘massive changes’ in the country’s existing Value Added Tax (VAT) laws and rules to boost growth of revenue, which remains one of the lowest in the region, the IMF local representative said Sunday.
Jonathan Dunn said Bangladesh introduced the VAT nearly two decades ago, replacing the excise duty system in a bid to collect more revenue, but the latest tax system has so far failed to make any major impact in revenue generation.
“The country introduced VAT in 1991. But in reality, it is excise tax, not VAT,” Dunn told a monthly luncheon of the Foreign Investors’ Chamber of Commerce and Industry (FICCI).
“Our advise is to bring massive changes in the VAT laws and rules,” he said, adding VAT will be workhorse of future revenue generation against the backdrop of the country’s policy of continuous trade liberaliasation.
Dunn said the IMF has been discussing with the NBR on VAT reforms for the last one year as part its suggestions to improve the country’s revenue generation.
“Time has come for the national board of revenue (NBR) to look into the matter seriously,” he said.
He said the changes in VAT rules and regulation should be business-friendly and the electronic cash registers should be introduced to collect VAT.
Bangladesh’s tax-GDP ratio has averaged a low eight-nine per cent for the last two decades, despite the introduction of VAT and a number of reforms at the NBR.
The ‘poor’ ratio is has seriously affected the country’s growth as the government could only allocate a fraction of the amount it needed to invest in infrastructure, health and education.
In the past few years, the IMF identified the VAT as a major drag on the country’s revenue system, but reforms it pushed through after the signing of three-year Poverty Reduction Growth Facility (PRGF) with the government also made little improvement.
Dunn also urged the government to activate the secondary bond market as part of key reforms in the financial sector.
The government initiated a move to establish a secondary bond market way-back in 2004, but there has been no significant progress until now.
He said the country’s reserve is currently below its three-month import payment bill due to price hike of commodities in the international market.
The IMF always suggested its member countries to keep reserve level equivalent to three-month’s import bill as a safety against any major external and internal shocks.
Dunn, however, termed the country’s balance of payment as ‘pretty balanced’.
His comments came as the country’s foreign exchange reserve fell below US $6.0 billions last week due to huge import payments.
The reserve is expected to surpass the $6.0 billion ‘comfortable level’ in the next week amid increased flow of remittance and export earnings.
Dunn said the country’s macroeconomic performance was ‘remarkably resilient’ in a year of multiple natural disasters and elevated international food and fuel price.
A strong pick-up in the domestic economies activities in the second half of the year and rapid growth in garments exports and remittances enabled the country’s growth in FY 08 to exceed six per cent, he said.
Source: The Financial EXpress
NBR seeks to engage local govt leaders, clerics in tax campaigns
July 27, 2008
The revenue authority, as part of its non-traditional approaches to give a boost to tax incomes, has planned to engage local government leaders and clerics in extensive campaigns for paying tax.
Encouraged by the initial responses to its ‘soft and self-motivation strategy,’ the National Board of Revenue now believes that the better-off living outside big cities can be brought into tax network using the influence and command of local body leaders and the clergy.
NBR chairman Abdul Mazid recently wrote to the secretary of the religious affairs ministry and the director general of Islamic Foundation seeking to involve imams of mosques, madrassah teachers and clerics of other major religions like Hindu, Christianity and Buddhism in preaching about the religious and ethical compulsions of paying tax for the welfare of the society.
He also wrote to all deputy commissioners and upazila nirbahi officers to take steps to educate all union parishad chairmen and members about rules of taxation so that they can motivate people to pay taxes.
‘We have to look beyond the territories of capital, divisions and district towns to earn more taxes as our tax-GDP ratio is one of the lowest in the world,’ Mazid told New Age on Saturday.
A huge number of taxable income group people in rural areas remained out of NBR purview, he said. ‘We have to collect taxes from potential tax payers at thana level.’
He believed that the clergy preaching about the vice of tax evasion could work wonders.
‘Clerics have an important role to play in motivating people to pay tax for both worldly and eternal gains,’ the NBR chief said.
Mazid, who frequently visits outside the capital in search of new taxpayers, Saturday attended three conferences of new self-motivated taxpayers at Fultala of Khulna, Avoynagar of Jessore and Tala of Satkhira district.
He distributed ‘self-motivated taxpayer’ cards among new taxpayers, sources said.
Currently, the country has about 26 lakh registered tax payers, of which only about six lakh submitted tax returns in the previous fiscal year.
The growth of tax income in the just-concluded fiscal year was above 33 per cent.
Though many believe that the revenue income growth was helped by stringent drives against corruption and tax evasion, finance adviser Mirza Azizul Islam last week gave credit to NBR’s reinvigorated drives.
Making a shift from the hard line taken earlier which generated fear factors among business taxpayers, the NBR has now been pursuing a soft approach to create self-motivation among potential taxpayers.
NBR has introduced ‘self-motivated taxpayer’ coupons among new taxpayers to welcome newcomers to the tax domain and offer them quick tax services, sources said.
Source: New Age
DCCI, DSE seek tax exemption from industrial investment
June 14, 2008
“If conditions on investment of undisclosed money is relaxed, a big amount of undisclosed money will be invested in the industrial sector, which will ultimately enhance the velocity of money circulation, augmenting the economic activities of the country,” said Hossain Khaled, president of DCCI, told a press briefing to express his organisation’s reaction to the new proposed budget in Dhaka yesterday.
The DCCI leaders were also of the view that in the FY 2008-09 the earning from undisclosed money will be dropped, as the time limit for whitening money is only four months.
They also urged the government to make the lowest earning ceiling of income tax at Tk 2.5 lakh from the proposed Tk 1.5 lakh since the cost of living has increased significantly on inflation and price spiral of essentials.
UNB adds: Dhaka Stock Exchange (DSE) operators yesterday urged the government to exempt the holders of undisclosed money earned by legal means from additional penalty if the money is invested in industrial sector.
“The government could exempt such money from additional charges for the betterment of the country’s economy,” DSE Chief Executive Officer Dr Salahuddin Ahmed Khan said at a post- budget press briefing at the DSE auditorium.