New income tax law should rid taxpayers of harassment

Businesspeople yesterday said the government should formulate a new income tax law with the objective to iron out all trust issues between taxpayers and taxmen.

The tax authority should also take the opinions of all stakeholders before finalising the proposed tax law, they added during a discussion.

The Economic Reporters' Forum (ERF) and the Business Initiative Leading Development (BUILD) jointly organised the event at the ERF office in Dhaka to discuss the draft income tax law prepared by the National Board of Revenue (NBR).

The NBR came up with the draft law, which was posted on its website in Bangla for the first time seeking opinions from stakeholders in October, to replace the existing Income Tax Ordinance 1984.

The purpose of any law remains unfulfilled unless there is coordination among lawmakers, implementing agencies and for those it is framed, said Mashiur Rahman, the prime minister's economic affairs adviser.

Abul Kasem Khan, chairman of the BUILD, said Bangladesh was in its transition phase to become a developing country.

Graduation will bring both prospects and challenges though.

"So, we have to increase our competitiveness and the number of products in our export basket to face the challenges. At this stage, businesses should be given incentives to enable them prepare," he said.

Khan went on to say that the opinions of businesses should be taken prior to the formulation of any policy that affects them.

"But we see that the draft of the new tax law is almost finalised and businessmen do not know about it in detail," he said, adding that the NBR sought opinions from businessmen regarding the law but they needed more time to share their views.

Khan then demanded the removal of advance income tax or withholding tax as the prevalence of the law reflects assumptions that businessmen do not want to pay tax.

"That is why tax is deducted at source," he said.

"It may be that some want to evade tax, but it would be unfair to consider all as tax dodgers."

On the issue, Md Shahidul Islam, first secretary (Tax Policy) of the NBR, said withholding tax is present in other countries and is collected to ensure funds for operating government activities throughout the year.

"If all pay tax in October or November of the year, where will the government get funds to bear its regular and development expenses?" he added.

Snehasish Barua, partner of Snehasish Mahmud & Co, said there are some good provisions in the draft income tax law.

This includes a proposal for e-tax management and incorporation of international best practices, a provision for the automated transfer of refunds to bank accounts of taxpayers, and measures to ensure transparency and accountability at the tax administration.

However, there are some provisions that will allow taxmen to exercise more arbitrary power when assessing taxes, he added.

Rizwan Rahman, president of the Dhaka Chamber of Commerce and Industry, also spoke at the event.