Home ›› 20 Oct 2022 ›› Editorial
Tax, both direct and indirect, is a main source of earning of government. Taxpayers and tax collectors are two integral parts of taxation system. National Board of Revenue is the main collector of tax in Bangladesh. According to demand and necessity of time different steps are taken to increase tax collection every year. Owners of motor vehicles and big house properties are potential tax payers but due to many reasons amount of tax collection from these two important sectors is not always up to expectation. In many cases owners of big house properties and private vehicles, particularly the luxurious ones, can’t be properly identified.
To overcome this situation NBR has recently tied up with three organisations to bring house and car owners of Dhaka under tax net. In a press conference on 7th August Chairman, NBR informed of signing Application Programming Interface (API) agreement with DPDC, DESCO and BRTA. Explaining the reason he informed that at the of finding out if house owners can understand that these persons have come from income tax department then they deny the ownership or identify themselves as caretaker of the house. Then we can’t do anything because we don’t have any evidence. This explanation is very much realistic. Income tax department, particularly Inspectors of this department, have very bad (please read - bitter) experience about it. Once, in course of an inquiry, I also had to face such an unpleasant situation. For this reason API agreement has been signed with DPDC and DESCO to identify house owners and electricity metre owners.
Out of 44,71,625 registered vehicles 3,70,519 are registered as private passenger car followed by 1,05,896 microbus and 66,219 jeeps (BRTA statistics dt. 13th February, 2021). Since 1 st July, 2020 owners of private vehicles have to pay AIT (advance income tax) yearly @ Tk. 25,000/- to 2,00,000/- on a single car or jeep ranging between 1500 cc - 3500 cc and Tk. 30,000/- for every microbus at the time of registration and afterwards for renewal of fitness. For more than one vehicle owned by one person amount of AIT is higher. Credit of this AIT is allowable in assessment. In the money receipt given by BRTA number of vehicle and name of the owner are mentioned but not TIN. If a vehicle owner does not show it in his wealth statement it is difficult for income tax office to verify/find out it.
AIT on motor vehicles is a major source of tax and BRTA is the sole collecting authority. For the purpose of collecting tax properly agreement has been singed with BRTA because information of vehicle owners are preserved with BRTA. In many cases vehicle owners do not furnish all relevant information to income tax department which hampers proper collection of tax from vehicle owners. In 2020 Central Taxes Survey Zone collected information from BRTA regarding 1821 luxurious vehicles (car and jeep) including BMW, Volvo, Mercedes Benz, Audi, Lexus, Jaguar, Hummer, Prado and Harrier. After verification it was found that 126 vehicles were registered using fake TINs. It is the responsibility of BRTA to verify the authenticity of TIN submitted to them but somehow or other it was not done.
In another meeting at NBR in January, 2021 it was informed that TINs of 12,85,572 vehicle owners were available in software of BRTA. Out of those 8,00,043 TINs were found genuine. 4,85,529 vehicles have been registered under fake TINs in connivance with dishonest officials of BRTA causing revenue loss of more than Tk. 1000 crore. According to NBR sources, maximum duty-tax on luxury vehicles is 822%. It is mandatory to mention information of every vehicle in return of the owner but no information has been furnished. Users of these cars valuing more than crore each are wealthy. Details of these vehicles were not mentioned in return to evade revenue and hide their actual income. After repeated meeting with BRTA the work of integrating system of BRTA with TIN server of NBR began to stop the use and activities of fake TIN. As an outcome of system integration of the two organisations fake TIN holders can be traced during vehicle registration or renewal of fitness. Then it will be possible to reopen the tax files of owners of those vehicles.
Experts think that both the organisations will have to work regularly on it. Experience says that many good initiatives have failed due to lack of proper care. So, continuous care should be taken to make it a success. Depending on result such agreement may be signed with organisations outside Dhaka also. According to laws of income tax malpractice with TIN is a punishable offence Penalty upto Tk. 20,000/- (for using fake TIN), upto Tk. 10,00,000/- (for not verifying the authenticity of 12-digit TIN), Tk. 50,000/- and or imprisonment upto 3 years may be imposed.
In press conference of 7 th August Chairman, NBR informed that new taxpayers can file return and pay tax on any day of the year. No penalty will be imposed for it. Assesse has been defined in section 2(7).
The term new assesse has been mentioned in section 68 but it has not been defined. For this purpose a new clause (iia) has been added to the definition of Tax Day --“in the case of an assessee, who is an individual and has not submitted return before, the thirtieth day of June following the end of the income year.”
According to section 75(5) last date of filing return of an existing individual assesse is Tax Day i.e. 30th November of the assessment year. For this year it is 30th November, 2022 but for new assesses it is up to 30 th June, 2023. To make this step effective public notice may be issued. It may be difficult for income tax circles to ascertain instantly whether an individual assesse is filing return for the first time or not. However, it is expected that huge number of new assesses will be encouraged to submit return.
The writer is a former Commissioner of Taxes. He can be contacted at chinmayprasunbiswas@yahoo.com
