The new drafts of the Income Tax Act have given special powers to the functionaries of the National Board of Revenue (NBR) in the decision to question income source and income tax rebate.
The new draft law, prepared by the NBR, is awaiting final approval by the cabinet division.
Reviewing the new Act, it seems that the NBR has left the final decision in its own hands regarding the special benefits in this regard under Section 78.
Section 1 of Article 78 states that by notification in the Board (NBR) Official Gazette, (a) The sixth schedule may be amended by addition, subtraction, modification or limitation as it deems fit; (b) And may make tax rebates, tax rate reductions, or other tax-related changes for the full or part of a class's income or a person's income.
This section of the new draft income tax law also came up in the discussion in a webinar organized by the International Business Forum of Bangladesh (IBFB) titled ‘Evaluation of Draft Income Tax Law’.
Dr Muhammad Abdul Mazid, former secretary and ex-chairman of the National Board of Revenue (NBR) and currently the chairman of the Finance Committee at IBFB presented the keynote papers.
He said that: “The tendency to change the Income Tax Act by issuing SROs bypassing the parliament must be kept to a minimum. The need to inquire about the source of income or wealth and who will be rebated and who will not be allowed (Article 78) will limit the space of such legislation.”
“The Indian Income Tax Law 1922 is the father of the draft Income Tax Act 2022, which is still the source of law in Bangladesh, India and Pakistan. In light of the theoretical concept of the existing income tax law and the draft law as well is inherently British, colonial in its judgement and preventive in practical terms,” he also informed.
The recommendations of the keynote paper say that—In case of tax refund; the draft law has ambitions for refunds in online management. It would not be advisable to acquire methodological skills and put the application into capable hands in its implementation.
In the case for payment of arrears-- the draft law will need to determine more logical and practical ways and in the case for ‘Acceptance and credibility of asset declaration,’ there must be a way in law to overcome the crisis of mutual trust.
There is a need to think more about the inconsistencies and complexities involved in opening e-TINs and filing regular returns.
The changing trend brought about year by year through the Finance Act has to be reduced.
Speaking as the chief guest on the webinar Professor Dr Shamsul Alam, Minister of State, Ministry of Planning said: “Income tax law must be development-oriented not tax oriented. In this regard, we made a number of recommendations in our eighth 5-year plan, firstly, so that the law does not change every year and secondly, planning for a tax justice ombudsman, increasing the scope of taxation at the district level, etc.”
“In case of appointment of the NBR chairman, it would be better if someone came with experience in NBR or revenue sector,” he added.
Chairperson of the event IBFB President Humayun Rashid said: “The new law has some excellent provisions but has not changed much, leaving 90% of the previous income tax law. The new law also gives excessive powers to NBR officials and as a result, there is a scope of illegal money transactions.”
“Simultaneously IBFB recommended years back that every taxpayer must have some sort of recognition which is related to the national ID so that the citizens feel proud as a taxpayer.”
“Bureaucracy partly acknowledged from the recommendation and brought into reality that those who are higher taxpayers get a CIP identification, which we really appreciate,” he added.
Marc Shiman, chief of Party, Feed the Future Bangladesh, was also present as the guest of honour.
Moreover, Dr Muhammad Abdul Mazid, presented a brief of policy recommendations in the webinar.
Lutfunnisa Saudia Khan, vice president (Finance), IBFB, delivered the vote of thanks.
Earlier on October 31 last year, publishing the new draft, NBR chairman Abu Hena Md Rahmatul Muneem informed that, after publishing the new draft, NBR will take the advice of the stakeholders till November 25, after which it will be sent to the cabinet department for final approval.
