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Tax commission needed to increase revenue

Published : Saturday, 14 May, 2022 at 12:00 AM  Count : 409
SM Jahangir Alam

SM Jahangir Alam

SM Jahangir Alam

Bangladesh's GDP was 26.60 percent. If we look at the five years before 2020, we can see that the revenue collection environment in Bangladesh is more fragile than other neighboring countries. Nepal is a small country. That too is far ahead of Bangladesh in terms of revenue GDP.

For example, in 2019, the rate of tax GDP in Nepal was 26.02 percent, at the same time in Bangladesh it was 9.9 percent. In India it was 19.06 percent and in Pakistan it was 14.06 percent. In 2020, the average revenue growth rate of developing countries was 25.06 percent, in 2019 it was 25.03 percent and in 2016 it was 26.01 percent.

However, the growth in the revenue sector of Bangladesh is increasing but not as fast as expected. According to the Ministry of Finance, although the growth in the revenue sector reached 14 percent in the fiscal year 2018-19, it came down to 4.02 percent in the fiscal year 2019-20 due to corona.

The present government has announced Vision-2041. The roadmap of Rupakalpa-2041 has been prepared with the aim of becoming a developed country. It also called for major changes in economic management over the next 20 years. At that time, the annual GDP growth was set at 9.9 percent, and the tax GDP target was set at 16 percent.

In this situation, the speed of revenue collection must be increased. On the other hand, achieving the Sustainable Development Goals (SDGs) requires an additional $2.5 trillion globally by 2030. And Bangladesh needs $928 billion. That means an additional $60 billion in investment every year.

To ensure this massive investment, revenue needs to be increased by making major reforms in the revenue sector.

Not only that, the efficiency of project implementation should be enhanced, regional cooperation should also be enhanced.
The current population of Bangladesh is about 160 million. Of this, only 16 and a half lakh pay income tax. According to a survey by the National Board of Revenue, about one crore people are able to pay income tax. A large number of people are still out of the tax net.

It is to be noted that the main source of government revenue in our country is the revenue sector. And that comes through the National Board of Revenue.

In the current financial year, the revenue receipts from the National Board of Revenue have been estimated at 58.1% and the receipts from the tax-exempt sector have been estimated at only 2.6%. The highest revenue under the National Board of Revenue comes from value added tax (VAT).

And this VAT evasion is more prevalent. Traders are evading VAT of thousands of crores of taka every year. On the other hand, there is a tendency not to pay revenue or income tax. Non-payment of taxes among competent taxpayers seems to be a trivial matter.

It is noteworthy that the big taxpayers make various excuses to pay taxes, at one stage they resorted to the courts.

According to the latest information, the number of revenue related cases in the high court is more than 9 thousand against which the amount of revenue is about 24 thousand crore.

There is a growing trend of non-payment of taxes by competent persons or organizations, delay in payment of taxes and evasion of revenue. This is not positive for the country.

Even in developed countries or neighboring least developed countries, taxpayers pay taxes voluntarily or on their own initiative. They consider it a civic duty to pay taxes. They also think that giving revenue to the government is an honourable thing.

The National Board of Revenue is taking various steps to increase revenue and is also taking various initiatives to pay taxes to the taxpayers.

However, the board also has some legal complications due to which the Board of Revenue, even if it wants to, cannot take many necessary and timely steps.

Due to their legal limitations, they cannot take appropriate legal action against tax evaders. In the face of manpower crisis, the National Board of Revenue cannot recruit the required manpower.

According to the Board of Revenue, they need more than 10,000 men which has already been reported to the upper echelons of the government. The board is also known to have problems due to manpower crisis.

In many cases the National Board of Revenue has limitations. Since the board is directly under the government or the Ministry of Finance.

In this context, the formation of a revenue commission called the National Finance Corporation to reform the tax system has become a matter of urgency. Earlier, such a demand was made by the top economists of the country.

In response to the demands of economists, the finance minister also said that two separate commissions would be set up in the revenue and banking sectors.

The minister said that two separate commissions would be set up, one to look after the financial aspects and the other to look after the revenue matters. But the government is not taking any initiative in that regard yet.

The finance minister said that there are many flats in the capital Dhaka which are not registered. Registration fee, stamp duty is so high that no one will register. If we are a little tolerant of these things, then there will be a lot of profit. 'There is no calculation of the number of houses and flats in the capital Dhaka. The number of houses and cars is increasing.

Those who own homes and cars have the ability to pay taxes. But they are out of the net. They need to be taxed, surveyed and encouraged to pay taxes. Manpower crisis or any other reason, they are not going to be brought under the tax.

In a word, the National Board of Revenue has many problems. In this situation, it is very important to form an independent 'Independent Revenue Commission' to increase the revenue.

Concerned economists believe that the government will take this matter seriously and urgently.

We have to keep in mind that if the revenue of a state is developed then the overall development of the country will be accelerated. Motivating every citizen to pay revenue is a policy ethical responsibility of the government.
Dr. SM Jahangir Alam, Vir Muktijoddha, Former Tax Commissioner and Director, Bangladesh Satellite Commission

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