Separate tax policy making from collection

Top business leaders yesterday urged the National Board of Revenue (NBR) to ensure a conducive business climate by bringing reforms to the revenue sector, including having separate administrations formulating tax policies and collecting revenue.

They also demanded that the authorities concerned ensure a "fear-free" tax office, expand the tax net and refrain from putting pressure on existing taxpayers.

The NBR should formulate a policy aiming to achieve the long-term targets foreseeing the economic situation, they said.

"When the NBR officials form a policy, initially they just focus on achieving immediate targets," said Nihad Kabir, chairperson of the trustee board of Business Initiative Leading Development.

They do not give thought on the targets of the next 15 years to 20 years considering the economic status, she said.

"But the separation is very important for a healthy business climate in the country," she said.

She was addressing a seminar on the role of income tax in a country's economy organised by the NBR as a part of its "Revenue Conference 2023" at Bangabandhu International Conference Center.

This will enrich the NBR's efficiency, echoed MA Momen, vice president of the Federation of Bangladesh Chambers of Commerce and Industry.

"If the tax policy and administration are separated, the policies will be business friendly," he said.

In terms of policy adoption for the upcoming budget, the NBR should play an important role considering the global economic situation to bring ease to the business climate, added Momen.

Due to tax exemption offered to green factories, the highest number of such factories now exist in the country, said Asif Ashraf, a director of the Bangladesh Garment Manufacturers and Exporters Association.

"We remain in fear all the time. Because, if we make a profit this year, we will have to pay the same amount of tax next year. But there is no guarantee of profit next year," he said.

However, at the event some taxpayers informed of incidents of sufferings they faced while paying tax.

They said they felt harassed by the NBR officials when they came to pay their income tax at the NBR office.

The policy should be formulated by persons who have adequate experience of working at the field level, said Md Tajul Islam, the local government, rural development and cooperatives minister.

There are a huge number of eligible taxpayers not only in urban areas but also in rural areas, he said.

As of January 2023, there are 84.49 lakh registered taxpayers but only 2.85 lakh submitted income tax returns as of December2022, according to the NBR.

There is a lack of trust between taxpayers and tax officials and this has to be overcome by increasing the use of information technology, said Mohammad Muslim Chowdhury, comptroller and auditor general of Bangladesh.

He also feels that revenue collection and revenue policy formulation should be under separate administrations.

Md Alamgir Hossain, a former NBR member, also spoke while Abu Hena Md Rahmatul Muneem, chairman of the NBR, chaired the event.