The government should relax the conditions to allow undisclosed money not only for investing in setting up new industries but also for preventing money laundering abroad.
The National Board of Revenue (NBR) chairman Md Ghulam Hussain yesterday came up with the observation while addressing a pre-budget discussion with the Economic Reporters Forum (ERF) held at the NBR headquarters in the capital.
Many developed countries have gone far away in terms of financial and social development, just allowing undisclosed money in investments with trouble-free conditions, whereas Bangladesh lacks in such facilities, said NBR chief.
“Since there have been tougher conditions for allowing undisclosed money in investment, the wealthy people are now busy in siphoning off those black money abroad.’’
“The money was supposed to be used in developing industries in Bangladesh but other countries are developing their industries with the money laundered from Bangladesh. The country is not only losing the money but also being deprived from a scope of creating new jobs,” he said.
The NBR chairman made the response while ERF former general secretary Abu Kawsar proposed the NBR to allow investment of undisclosed money with 2% penalty and also relax the conditions to evade money laundering from the country.
NBR chairman also said if the government allowed investing undisclosed money with relaxed conditions, there would be a rise in setting up new industries and money laundering could also be prevented.
Referring to an example of the Ready-Made Garments (RMG) sector, he said as the government had allowed investing undisclosed money to the RMG sector in 1989 and the sector now became the largest industry with creating employment for 40 lakh poor women while lives of around 2 crore people have also been changed remarkably.
ERF President Sultan Mahmud proposed the NBR to eliminate discriminatory tax system as people having Taxpayers Identification Number (TIN) were paying 15% tax while people without TIN number were paying only 10% taxes under the existing system.
Forum leader Sheikh Abdullah alleged that the people were evading taxes through transitions of land.
Urging the NBR to address policy-level loopholes, former NBR president Khaza Mainuddin said fast food, sweetmeat, hotel-restaurant businesses were evading Value Added Taxes (VATs).
In response to the proposal of ERF, NBR chairman said NBR would bring some major changes in the revenue collection system, particularly in the income tax collection system.
“Corporate tax rate will be brought down to almost same level of individual level income tax to encourage more investments,” he said.
He also noted that special emphasis would be given on income tax than the customs and VATs. “Large and medium industries from the rural areas will also be brought under the tax net,” he added.
Hussain said that the taxes on health hazardous products would see a sharp rise in the upcoming budget whereas NBR was also working towards bringing house owners, doctors, engineers, lawyers and other professionals under tax net.
Responding to queries made by ERF leaders, Hussain mentioned that though NBR was a big organisation but it lacked in sufficient numbers of inspectors that was hindering the field level inspection process.
“To ensure an effective tax collection system, we will need a tax inspector in each circle, although most of the circles lack in inspectors. A tax zone needs at least 27 inspectors, whereas currently there are only 7 inspectors in each zone,” he added.
Regarding the pending cases at courts, NBR chief said: “Around 10000-12000 cases have been remained pending at courts involving around Tk25,000 crore revenue as people secured stay orders from the High Court once the cases were filed against them for tax dodging.
