'Dependency on indirect taxes like customs and value added tax (VAT) was one of the major reasons behind inequality'
Sushasoner Jonny Procharavizan (Supro), a local NGO working for good governance, on Monday urged the government to ensure equality in tax management in terms of rationalizing direct tax and indirect tax ratio.
“We have much inequality in our tax management, which the government should address along with raising the taxpayer number,” said Abdul Awal, chairperson of Supro.
He came up with the remarks while addressing a view-exchanging program on upcoming National Tax Day-2019 at CIRDAP auditorium.
Planning Minister Ma Mannan and former National Board of Revenue (NBR) chairman MA Mohammad Abdul Mazid were present among others.
Awal said the government was creating pressure on the taxpayers paying tax regularly while those evading tax were going scot free.
“Expanding the tax net is not only solution; the government must protect revenue from being dodged,” he suggested.
Mohammad Shahid from Supro presented a research paper titled ‘Fair Tax Monitor in Bangladesh 2018-an overview’, in which he said the country Tax to GDP ratio was the lowest among the neighboring South Asian countries.
Dependency on indirect taxes like customs and value added tax (VAT) was one of the major reasons behind this, he pointed out.
In recent years, the direct tax share remained about 30%, which meant lion's share of the pressure was on the average people, especially lower-earning groups, added Shahid, saying that such tax management was regressive for the poor.
Tax dodging especially by multi-national companies, pending lawsuits, poor auditing system and huge tax exemptions were also responsible for the situation, he mentioned.
On VAT issue, Supro believes that there is immense injustice against poor people.
“But the matter of sorrow is that the poor have no idea that they are paying tax every day,” said Shahid, adding that the poor in return were getting less public services.
Another noticeable issue is that VAT is not properly deposited to exchequer by the business community, who collect it from consumers.
Supro recommended that the government should develop progressive tax system as a means of redistribution and efficient use of resources to address ongoing social inequality.
NBR should be strengthened with modern ICT tools and techniques, it suggested, adding that the capacity of tax administration needed to be enhanced.
Besides, it demanded that updated report of audit, conducted by Comptroller and Auditor General, should be made available annually to the tax payer citizens.
Planning Minister MA Mannan thanked Supro for arranging such program and said his government was working to ensure equality in tax management.