The economic development of a country remains a civic responsibility of its citizens which includes submitting taxes. However, the long-complicated and pain-staking process of submitting tax returns often causes fear and confusion among many citizens.
Bangladesh is no different in this case -- we often find complications in filing taxes and the lack of awareness upon submitting the tax returns causes errors in filing and non-compliance. In order to submit tax returns, oftentimes we either seek help from a Tax Return Preparer (TRPs) or some lawyers.
To facilitate tax return submissions, the National Board of Revenue (NBR) publishes updated manuals on tax submissions each year. However, few people are able to invest sufficient time and effort to read and understand, often seemingly complicated, tax manuals.
Including tax related lessons in our education curriculum can help our citizens confront their fear of tax return submissions and raise a sense of civic duty.
In order to train our citizens to submit tax returns, tax education should be part of our financial literacy program included in the secondary school years. Secondary school (Class 9-10) could be the perfect time to teach young minds since they have enough cognitive and mathematical ability to understand and calculate taxes for different kinds of cases.
Moreover, equipped with this new knowledge, students could help their parents and other family members submit tax returns. Most importantly, those young minds will be better aware of their civic responsibility to the nation and will be able to better contribute through taxation by themselves in the near future.
Criticism and counterarguments
Now, one may argue that tax education is not going to replace the professional TRPs and lawyers, so what is the point of incorporating tax education in our curriculum?
The answer is that while tax education may not fully replace them, by including it in the curriculum, an informed population with substantial knowledge on tax submission is ensured. They will be much more aware of their tax submissions than that of the population who are not educated about it.
At the very least, people will be more aware of the loops and holes that the professional tax lawyers utilize. The objective should be to create a more informed population, not to replace the professionals.
Another thing that the naysayers may still say is that any high school graduate is capable enough to read and understand by themselves the tax manuals published by the National Board of Revenue. So, what is the point of giving separate training on tax submission?
It is true that any high school graduate should be able to do just that, however, as argued before, we barely get enough time and guidance in our work life to help navigate the complex systems of tax submission that allow us to get the maximum amount of tax deduction and other facilities. Learning tax submission during the school years will give us the necessary training and confidence to help us file taxes in our professional careers.
Tax education should be part of our financial literacy program included in the secondary school years
Tax education initiatives taken by other nations
The Internal Revenue Service (IRS), tax collecting authority in the United States, provides resources to teachers for tax education customized for middle school, high school, and community college students. Moreover, a high school in California, United States set an example of how school children can help adults to file taxes. Under the supervision of a tax expert, the school goers prepared tax files of the local residents gaining invaluable knowledge and experiences for themselves and providing community services.
The Australian Taxation Office provides resources that can be taught aligned with school curriculum or can be taught at home under the initiative titled “Tax, Super + You.”
Likewise, the UK government's HM Revenue and Customs provides “Tax Facts,” free resources for teachers and parents that have relevant teaching materials on tax education adjusted for different age levels of young students.
Jamaica initiated “Schools Tax Education Programme” (STEP), Kenya introduced Schools Outreach program. Inland Revenue Board of Malaysia (IRBM) organizes Tax Education Camp, Speech Competition targeted for secondary school children. Many countries across the world implement school-based tax education programs.
Bangladesh perspective
We can also adopt such financial literacy programs for school children in Bangladesh, where they can learn about taxation, solve various kinds of case studies to calculate taxes of different individuals with different conditions.
In addition to learning tax submission theoretically, tax camps held in Bangladeshi schools like in Malaysia will give our students the life lessons needed as conscious tax paying citizens. Thus, those future taxpayers will be more confident about their financial decisions.
Apart from these, tax literacy programs will not only help us to file taxes but also make more informed financial decisions. Young entrepreneurs (especially those who do online business) will be better able to navigate how they should conduct business activities that will benefit them as well as will improve tax compliances.
A driver to maximize social benefits
Tax education in the secondary school system can create a culture of voluntary tax compliance and increased community services. Informed citizens will have greater trust in the state since they will be able to understand the seemingly opaque tax systems of our country and will have reduced apprehensions to submit tax returns.
With income tax being one of the key pillars of domestic resource mobilization, tax education will help the government to implement more ambitious fiscal plans. Moreover, an educated tax-paying population will be more aware of the institutional quality of a country, thereby suggesting that tax education can maximize social benefit and ensure sustainable economic development.
Dr Md Moniruzzaman is a Professor at the Bangladesh Institute of Governance and Management (BIGM) and a former additional secretary to the government of Bangladesh. Email: [email protected]. Syed Mahin is a Research Associate at BIGM. Email: [email protected]
