Only 43 people in Bangladesh pay annual tax of more than Tk1 crore. Of them, most are contractors and importers. According to NBR, only 2,105 people pay over Tk20 lakh in income taxes every year.
Interestingly, NBR says there are at least 5,000 people in the country who are capable of paying over Tk1 crore in taxes. The number is above 10,000 when the amount of tax to be paid is more than Tk50 lakh.
Experts say the people capable of paying huge taxes have managed to stay away from the taxnet because of weaknesses in the government's audit system and corruption in the revenue department.
Some citizens use their political affiliations to avoid paying taxes.
The National Board of Revenue says more than 80% of the people capable of paying taxes are not doing so. Out of the six million people who can pay tax in the country, only about 1-1.2 million people are regularly paying taxes. Interestingly, most of them are businessmen.
When considered against the total population of about 160 million, this is just 1%. Experts say authorities and capable tax payers should reach a consensus through talks to improve this.
Although the existing progressive taxation in the country stipulates that the more one earns, the more tax they should pay. In reality, only those with limited and low incomes are the ones who pay taxes regularly.
NBR sources said that at present around 1.8 million people have tax identification numbers (TINs). But unfortunately, 800,000 of them never file their tax returns. They acquired the TINs for various purposes but they never submit returns.
According to a Bangladesh Bank report, more than 30 million people have up to a total of Tk1 crore in savings in all the commercial banks in the country. The interest they earn from this money is taxable, but most of them never pay tax. In addition, most of the owners of buildings and lands in Dhaka and other cities have also remained out of the taxnet.
Finance Minister AMA Muhith recently told the Dhaka Tribune: “You cannot force people to pay tax. It is all about mass awareness. If you can raise awareness, tax collection will increase. Every year, the government tries to raise awareness through various programmes on the National Income Tax Day.”
When contacted, NBR Chairman Najibur Rahman said: “There has been a rise in interest among people about paying taxes. But this is very insignificant. Still, we are trying our best to encourage people to pay taxes.”
He also said: “People have many negative and terrible ideas about the revenue department. But these are changing. The government nowadays accepts people's suggestions to increase revenue collection.”
AB Mirza Azizul Islam, adviser to a former caretaker government, said corruption and manpower shortage of the revenue authorities are known problems. “But the government also needs to simplify the tax payment system. They must work to build trust among the taxpayers. Bureaucratic complications and harassment must also stop.”
For the ongoing 2014-15 fiscal year, the government wishes to collect Tk57,500 crore from taxes out of the total revenue target of Tk1,49,790 crore.
Until January 31, the NBR collected Tk68,651 crore of a Tk71,825 crore target.
Under the existing laws, any annual income above Tk2.2 lakh after deducting house rent, transport cost and medical allowance is taxable.