Discrepancies between actual prices of tangible assets and those set by the government have been hampering revenue collection, especially from sale of assets such as land, apartments and cars.
The National Board of Revenue (NBR) yesterday discussed the issue in a meeting, chaired by its Chairman Ghulam Hussain, with all its commissioners from the Dhaka Zone.
An official, who attended the meeting, said the prices that the government had set, were far too low compared to the prices at which these assets were actually sold, especially by private owners.
The sellers often take advantage of these discrepancies and prepare documents quoting assets at the rates set by the government, while in reality, the amounts they actually realise as proceeds are much higher; thus depriving the government from huge amounts of tax revenue.
“The board will soon recommend the land and law ministries and the inspector general of the Directorate of Registration to reevaluate the prices set for lands, apartments and vehicles in order to narrow the gap and ensure smooth tax collection,” the NBR official said.
According to the NBR, there are around 5,000 “wealthy” people in Bangladesh who own properties worth over Tk2 crore.
When these people sell any of their assets, the government generally charges them 10% surcharge in addition to their regular income taxes.
However, NBR officials said the actual number of “wealthy” people would be much higher because many take advantage of the low prices set by the government and underquote their properties to evade tax.
An official said: “As per the rule, we charge 10% surcharge in addition to the income tax paid by a person, who owns net asset worth over Tk2 crore. But, because of the information gap, we cannot identify many of them.”
“Let us say a person inherited a piece of land in Gulshan. He handed that land over to the developers and got three apartments in return. If that person lives with his family in all those three apartments, then there will be no rent income from those apartments. But considering that fact that the person owns three apartments in such a posh area, it is hard to believe that the person has no income,” the official said.
“People evade tax by registering newly bought apartments or lands in the names of their relatives. Vehicles are often registered against company names. If the actual and government prices could be synchronised, we would be able to conduct surveys and collect legitimate taxes from them,” he said.
According to the World Ultra Wealth Report 2012-13, there are 85 Ultra High Net Wealth Individuals in Bangladesh who own a total wealth of $13bn (approximately Tk1 lakh crore).
The official also said the Central Intelligence Cell of the NBR had been collecting information on the owners of vehicles, lands and apartments. As soon as the problem was resolved, NBR would impose taxes on them to boost revenue collection.
