For those house-owners, who have been evading tax for decades, things may turn out to be difficult if the prime minister approves the revenue authority’s budgetary proposal to go tough against them.
According to an official, the National Board of Revenue (NBR) has planned to strengthen monitoring against the tax-evading house-owners. This, in fact, is one of the major proposals from the NBR to boost revenue collection in the upcoming fiscal.
Another budgetary revenue-booster, subject to the premier’s approval, could be raising the tax imposed on the import of gold in baggage.
Today, the NBR in a key meeting with Prime Minister Sheikh Hasina is likely to place these issues before finalising its draft budget outline for the FY2014-15, officials said.
The revenue part of the annual budget is generally prepared by the NBR. The Finance Division of the Ministry of Finance prepares the expenditure part.
The tax authority is likely to set a revenue target of Tk1,49,000 crore in the upcoming budget alongside plans to expand the tax net by bringing necessary changes to the tax and duty structure.
“We have prepared a plan to bind the house-owners to collect rents through banks,” an official said.
He also said because owners do not give formal money receipts to the tenants while collecting rents, they managed to conceal the actual amounts they had collected and thus evaded tax.
After introducing the rule, the NBR would collect relevant information from the banks, the official said.
He also said Finance Minister AMA Muhith in a meeting last week gave consent to the NBR officials regarding the unique new rule.
According to Chairman Ghulam Hussain, the NBR has identified a staggering total of 1.62 lakh owners in only a few selected areas in the capital, who have been concealing their incomes from house rents while submitting returns.
An NBR survey, conducted from December 2012-November 2013, shows that out of the tax evading owners, 70% were businessmen by profession, 25% just owners and 5% shop owners.
Gold import tax
In the wake of the recent hike in gold smuggling, another proposed revenue-boosting plan is to increase the existing Tk150 tax to Tk3,300 on every tola of gold imported in baggage.
However, the assumption is that the authorities concerned would strengthen monitoring at the airports to curb gold smuggling. In that case, people would be forced to bring in gold in their luggage and the government can benefit from it, the NBR official said.
Under the existing baggage rule, a passenger can carry gold or silver ornaments weighing less than 200 gram without paying any taxes.
Curtailing corporate tax
In today’s meeting, the tax authority is also likely to place a proposal for curtailing corporate tax.
A high-ranked official said the NBR would propose cutting tax for banks and financial institutions from the existing 42.5% to 40.5%.
He however could not shed any light when asked whether or not the other corporate firms would be given the same facility.
In forums and pre-budget discussions, trade bodies such as the FBCCI have been asking for lowering of corporate taxes terming them too high.
Many of the chiefs of the trade bodies are owners of major commercial banks.
Other proposals
Some of the other proposals that the NBR is likely to place before the prime minister are: raising tax on products hazardous for health and the environmental such as cigarettes; tax-free income ceiling of Tk2.25 lakh for individual payers; schemes for protecting local industries; continuing tax holiday for sectors including the agriculture, dairy and poultry.
