Frustrating picture of tax return submission

The picture is rather dismal in Bangladesh when it comes to the issue of tax return submission. Most of the people are not interested in submitting tax returns. The reasons are intriguing. The problem lies with both sides. On the one hand the government is not able to persuade the citizens to file tax returns and on the other hand people are reluctant to submit their tax returns. It has been the same tale since our independence.

There has been very little change since then. The majority of the people who are eligible for paying taxes are not doing so. As many as two-thirds of the eligible taxpayers evade paying taxes, according to relevant studies. 

First of all we need to understand if citizens don’t pay taxes a country can’t run as it needs money to run its day-to-day activities that include providing public services and infrastructure. But when they don’t pay all these services and infrastructural activities are hampered that finally cast a negative impact on the lives of people.

Where does the government spend its tax money? It spends its money on building roads, schools, colleges, universities, providing healthcare services for poor people, protect people from natural disasters and ensure their safety. If so, why shouldn’t people submit their tax returns and pay taxes?

The question is simple but the answer is not that simple. Our country is the lowest-rated in terms of submitting tax return. But there are some countries like Denmark, Sweden, Spain and the United Kingdom where taxes are filed automatically. There is no question about it from the part of people as they know where their money is spent. They also enjoy most of the facilities being a citizen of a country.

Usually people of developed countries country willingly submit their tax returns because they enjoy civic amenities in return. Do we enjoy the facilities that they do? The question is obviously rhetorical and the answer is obvious.

The government has been desperately trying to motivate people to pay taxes for quite a long time but with a little progress so far. The rather gloomy picture was revealed in a report of The Business Post on November 27. The report said in terms of percentage of tax return submission Bangladesh is the lowest compared to its neighboring Pakistan, Bhutan, Nepal Sri Lanka and India.

According to the report the government should adopt a friendly approach while collecting taxes and simplify relevant laws to boost the country’s tax-to-GDO ratio. The view was expressed at a seminar on ‘100 Years of Income Tax Law of Bangladesh – Expectation and Achievement’.

While speaking as the Chief Guest at the seminar Planning Minister MA Mannan said: “The practice of tax exemption should be abolished right now for the greater interest of the country. Why are tax exemptions on the rise is the country is completely unknown to me?”

People must understand paying tax is a basic duty for every citizen and if they don’t pay taxes regularly eventually it is they who have to suffer. Again the government must realize that if people aren’t served properly and if their basic rights are not preserved they just become discouraged and don’t pay taxes.

 Cuts in tax rates, simplifications of tax laws, removing loopholes in the tax system and proper processing of information available under the annual information return are seen as the best tools for improving tax compliance.

We believe that the government can do three things to increase tax revenue – firstly it can take a friendly and motivational approach to convince people to pay taxes and submit their tax returns, secondly, it can take up some measures like spreading tax office all across the country and more fresh prudent tax laws and thirdly, the relevant government departments have to serve people better so that they can realize that it is their duty to pay taxes and submit tax returns.