The National Board of Revenue (NBR) has set a target of increasing the number of income tax payers up to one crore from the existing 23 lac by making mandatory the filing of tax returns for the tax identification number (TIN) holders.
Finance minister AHM Mustafa Kamal proposed compulsory income tax return filing for TIN holders at the proposed budget for the next fiscal.
NBR data shows that, there are some 50 lac TIN holders in the country but tax payers’ numbers are less than half of the certified TIN holders, which, economists dub as inefficiency on the part of the NBR.
The minister proposed to make filling of income tax return for all TIN holders mandatory alongside imposing tax on the commission of bond trading in the stock market.
There is also a proposal for truncating tax waiver on the expenditure of company’s promotion.
Taking with the Business Post on Sunday NBR officials said, the government has adopted a policy of extending number of income tax payers by cutting tax rate which is reflected in the proposed budget.
Striking a balance on the growing income of the people, Kamal extended the tax free income bracket from Tk 2.5 lac to Tk 3 lac.
NBR chairman Abu Hena Md. Rahmatul Mumin in a post budget press conference said, "In Bangladesh, the tax rate is relatively higher than any other country in the world which encourages the people to evade filing tax return. Even rich people are not interested in paying income tax."
"We will extend the income tax net by reducing tax rate which is already proposed in the new budget" he added.
An NBR official seeking not to be named told The Business Post "Survey conducted by the NBR finds a large number of rich people are still out of the purview of income tax. Legal action will be taken against those persons who are not paying income tax despite being eligible."
Tax on bond trading:
From now on NBR will impose 5% tax on the commission of brokerage houses receive through trading bond in the stock market.
There are three types of bonds in the market ranging from the duration of five, ten and twenty years which are usually bought by the business conglomerates.
At present, companies are paying advance tax on bond purchases and pay tax at source while trading bonds.
Commenting on the decision of imposing 10 % tax on the commission of brokerage house Muhammad Abdul Mazid, former chairman of NBR said, “It is a good move and will help flourish the bond market of the country."
Tax on businesses:
To promote businesses, governments usually declare tax waiver and policy help in the budget so that companies keep running their business and make profit. In the existing law, there are tax waivers on the expenditure of company which is branded as 'promotional expense'.
To check the abuse of this provision, the finance minister proposed a 5% tax waiver on the operational cost which was 1.5% previously.
NBR officials alleged, in the name of promoting business, many companies show inflated expenditures as promotional cost.
