Business Initiative Leading Development (BUILD) has urged the National Board of Revenue (NBR) to put more focus on widening the tax net for the sake of reducingthe existing extra tax burden on the individuals.
“Once the tax network is increased, it will help escalate revenue collection,” it said.
Public private dialogue platform BUILD has come up with the suggestion while placing its pre-budget proposals to NBR recently, according to a press release issued by its Chief Executive Officer Ferdaus Ara Begum yesterday.
This is one of the total 90 proposals, including 18 on income tax and audit, 21 on VAT, 35 on customs, and 16 on simplification of Alternative Dispute Resolution (ADR) policy. The proposal was handed over to NBR Chairman Nojibur Rahman on March 7.
Currently, less than 1% of the population pay tax in Bangladesh, a country of around 16 crore population. Around 18 lakh people have taxpayers identification numbers, however, only around 12 lakh of them submit their income tax returns regularly.
BUILD has also requested the NBR not to enforce uniform corporate tax rate for all the companies and instead, it suggested to do future study before implementing the move.
A uniform income tax rate will be applicable for all companies and there will be no provisions for minimum tax ceiling for individual taxpayers, according to the draft of Direct Tax Code, which is likely to be finalised by the year-end.
In case of audit, BUILD has proposed to establish a risk-based audit system and urged the NBR authorities to establish a ‘Good Governance and Integrity Unit’ in its office to ensure clarity and transparency in the audit system.
It also recommended for reducing time to resolve the cases and issuing a guideline for the taxpayers so they van understand their mistakes ahead of submitting their returns.
Regarding customs, BUILD put emphasis on simplification of process for procurement and import of raw materials for domestic industries, along with ensuring proper supports to domestic industries that produces same raw materials in the country.
The differences between duty of finished product and raw materials of the same product produced in the country should be justified, it added.
In regards to implementation of new Value Added Tax and Supplementary Duty Act 2012, BUILD preferred for an extended amount of VAT exemption limit and lowering VAT rates for some areas like health and education.
The government is all set to enforce the new VAT law from July 1, 2016 which will bring all the companies under a uniform 15% VAT rate.
In respect of ADR, BUILD has proposed NBR to review the role of facilitators and to allow small entrepreneurs to avail of benefits of ADR.
The other suggestions from the platform includes eradication of general bottlenecks in the taxation system, people’s apathy towards tax payment, and sufferings of the genuine taxpayers.
