Short Berif on Bangladesh Tax Syster

8/13/2019 Short Berif on Bangladesh Tax Syster

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TaxationShort Brief on Bangladesh Tax system

2013

12/1/2013


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Table Of Content

Part No. Main Head Pages

1. Acknowledgement 3

2. Executive Summary 4

3. Introduction 5

4. Types Of Income 6

5. Classification Of Tax System 7

6. Types Of Taxation 8

7 Methodology Of The Study 9

8. Limitations Of The Study 9

9. How Income Tax Is Calculated 10

10. Income Which Is Exempt From Tax 11

11. Tax Allowances 11

12. Assessment Procedure 12-16

13. Paying Tax Under Universal Self-Assessment U/S 82BB

16

14. Due Date For Payment 16

15. Income Tax In Bangladesh 17-32

16. Conclusion 33

17. Reference 33


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Acknowledgement We are very much grateful to ALLAH first, who has given us all the abilitiesto perform this chore. Next, we would like to thank our respected FacultyRashadul hassan Faculty of Business at AIUB who gave us the chance tosubmit this Assignment Report & Presentation and also co-operated us withall kinds of rational suggestions, rehearsal and guidance.

We also like to thank our all members without our alls inspiration, thismission was not able to be accomplished.

At last but not the least, we are grateful to our ever-respected parents thosewho always give us mental support and well wishes.


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Executive SummaryThe main objective of the study is to evaluate the systems and performance

of present tax authorities and how to boost up them also to gear up in this

sector to implement the law with honesty and in a proper way to increase

revenue of the Govt. from this sector.

The other objectives to observe the -

I.

why need to pay taxII. Importance of tax


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Income tax is a tax paid on income. It is paid by the all sorts of people whose havetaxable income, employees and people who are self-employed. It may also bepayable if you aren't working if, for example, you have an income from a pension orsavings. Not all types of income are taxable and it will seldom be the case that allof your income is taxed. There is no minimum age at which a person becomes liableto pay income tax. What matters is the amount of your income. If this is below acertain level, no tax is payable. Commonly there is two types of tax payers. One is

Individual, another one is institution or corporate.There is no single definition in tax law of income. Income tax law divides varioustypes of income into schedules. If an item comes within a schedule it counts asincome and income tax must be paid on it. The way the tax must be paid willdepend on which schedule it falls into. The most common schedules are Schedule Efor employees and Schedule D for the self-employed. So tax is to be paid by themwhose/who have income over the limit of stated level by the authority time.

In everywhere of the world tax is a common factor for the people to the Govt. bywhich Govt. maintain the Infrastructure development, National security, Socialsecurity, Education, Administrational expenses of the state.

It is a gentleman commitment to the Govt. of the nation who are earning from thelocal or internationally by the way of income from Salary, from business, frominvestment, from selling from assets (bearing income), from commission, or fromconsultancy whatever that may be they will have to pay tax. Or on the hand it maycalled that it is a part of profit to pay Govt. in the form of tax by which Govt. aremaintaining the all sorts of expenses locally or internationally and to main regularactivities of the countrys.

So it can be said it is the main part of source of income of a country. But InBangladesh:

What is the present scenario of Tax- Only 2.06% ( 33,00,000 /16,00,00,000*100) of the TIN holder of the total people. Not only that ofwhich return are filled from that is 0.75% ( 12,00,000 /16,00,00,000*100) and tax paid thereon only 0.50%. Can we imagine this is the verymuch latest scenario of tax in our country. So this is our project where wediscussed about how the Govt. can maximize the revenue from tax.

INTRODUTION


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Types of Income

Income

Assessable Income Non-Assessable Income

Taxable Income Non-taxable Income

Income: Income means anything received in cash or in kind unless exempted by

laws. 1) Assessable Income: Assessable Incomes are those incomes, which are

included in the determination of total income of a taxpayer.

a) Taxable Income: Taxable Incomes are those incomes that the tax is

to be paid on those incomes.b) Non- Taxable Income: Non taxable income is taken into total

income for taxation rate purpose but no tax is to be paid on this part

of income.

2) Non- Assessable Income: Non- assessable incomes are those incomes

which are not included in the determination of total income of a taxpayer .


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3)

Classification of Tax systems

Classification of Tax System

Single Tax MultipleTaxes

1. Single Tax: Only one tax for everybody. Single tax is the poll tax or

the head tax or adolescent tax, which is imposed on a person simply

because he is there in the society.

2. Multiple Taxes: A system under which different types of taxes shall be levied by the govt. according to suitability. Ex. Income Tax, VAT.


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Types of Taxation

Types of Taxation

a) Progressive Tax a) Direct Tax

b) Regressive Tax b) Indirect Tax c) Proportional Tax

a) Direct Tax: Direct tax is a sort of tax the impact of effect incidents and

which fall back on the person on whom it is imposed. i.e.: Income Tax,

Marriage Tax etc.

b) Indirect Tax: Indirect taxes are those burden of which can be passed on

others through price vehicles.

c) Progressive Tax: The tax rate increases as the taxable income/amount

increases.

d) Regressive tax: The opposite of a progressive tax is a regressive taxwhere the tax rate decreases as the taxable income/amount increases .

e) Proportional Tax: In between is a proportional tax, where tax is fixed asthe amount to which the rate is applied increases .


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METHODOLOGY OF THE STUDY Methods of this study include data collection, and to evaluate along with some

opinion:

Sources of Data

To conduct the study a small area is used. One is The ordinance of 1984

another one is National Board of Revenue. It is to be noted that The NBR (

National Board of Revenue ) was not quite happy to deliver the data as

because no data were kept by them in properly to deliver the people. Most

dates are collected from web and out taxation books.

However we are studying Tax course so we have putted some opinion from

our study experience.

LIMITATIONS OF THE STUDY

I have faced some usual constraints during the study. These are as follows: Relevant papers and documents were not available with sufficient

data.

Enough information was not found to make a comprehensive study.

we had to complete this study within a very short data, which was not

sufficient.

In spite of our sincerity, some mistakes might have been occurred.

We admit our responsibility for those inadvertent mistakes, if any.


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How is income tax calculated

To calculate how much income tax is payable for a particular year, use the

following steps:

Step 1: Add together your yearly income from all sources, includingearnings, social security benefits, income from renting out accommodation,pensions and interest from bank and building society accounts. Rememberto use the gross amounts, that is, the amount before any tax has beendeducted.

Step 2: Take off any income which is exempt from tax, for example, certainbenefits. Check whether you can claim tax relief on any of the money youhave spent over the year (tax relief usually applies to people who are self-employed and have to buy items for the business). Deduct any tax relief.

Step 3: check which tax allowances you are entitled to. You will be entitledto a personal allowance (plus age related additions if appropriate) and youmay be entitled to blind person's allowance. These allowances are deductedat this stage in the calculation, leaving income on which tax is payable. Thisis called taxable income .

Step 4: Multiply your taxable income by the appropriate tax rate. Differentrates apply to non-savings income such as earnings and pensions and

savings income such as interest from bank and building society accounts.You now have the amount of tax due to be paid that year, unless you areentitled to married coupl

e's allowance (see below).


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Income which is exempt fromtax

Some income is exempt from income tax, which means that tax is not paidon it. This income should therefore be put to one side before estimating howmuch tax is payable. Examples of income which is exempt from tax includepremium bond prizes, Housing Benefit and Child Benefit.

For a list of income which is exempt from tax.

Tax allowances

Tax allowances :

Everyone is entitled to a basic personal tax allowance . You may also beentitled to other allowances on top of the basic allowance. This means thatsome of your income, which would otherwise be taxable, will be tax free.

Tax allowances are announced in the Budget each year. If you are anemployee and so are taxed under Pay As You Earn (PAYE), your personalallowance(s) will be spread throughout the year, so that each week or monthyou will be left with a certain amount of tax- free income after the tax hasbeen deducted. If you are self-employed or have an income but are notworking, your personal allowance(s) will be taken into account when yourtax liability is assessed each year.

For information about personal tax allowances and who can claim whichallowances, see Income tax allowances.

For more information about amounts available, see Income tax allowances:amounts.


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Assessment procedure

Tax relieves :

In addition to personal tax allowances, income spent on certain things canbe deducted when calculating tax. This is known as tax relief on outgoings.These reliefs reduce the amount of tax payable.

Tax relieves for employees are spread throughout the year in the same wayas personal tax allowances. Tax relieves for self-employed people and peoplewho have an income but are not working are taken into account when tax isassessed after the end of the tax year.

For more information about tax relieves, may be seen proper section.

Assessment procedureIncome tax rates

Income is taxed at different percentage rates, depending on the amount oftaxable income and the source of the income. These rates are announced inthe Budget every year.

For more information on income tax rates, including rates for past years andhow to calculate how much tax is payable.

Among direct taxes, income tax is one of the main sources of revenue. InBangladesh Income tax is imposed on the basis of ability to pay. The more ataxpayer earns the more he should pay - is the basic principle of chargingincome tax. It aims at ensuring equity and social justice.All individuals and companies in the country need to pay income tax if theirannual income excess certain limit determined by the Government. Thereare some conditions for paying Income Tax which are controlled by Tax Lawsand Amendments in Bangladesh.Income Tax Return is a structured form where the Tax Payer mentionshis/her income and expenditure, resources and credit information to submit

them to the Income Tax Office. The form is different for the individual andcompanies. Tax payers need the Tax Identification Number as well as someendorsed documents (the description of salary, security money, housingproperty, business, partnership basis income, profit on capital, income taxpay order etc.) to submit the Tax Return Form. The Return Form is availablein the website of National Board of Revenue ( www.nbr-bd.org ) which isdownloadable with free of cost. All individual or company can have theirTaxpayers Identification Number from respective income tax office.
http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/


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Each class of tax payer has to submit their return form to the selectedincome tax circle. National Board of Revenue of Bangladesh administers thetax system under Internal Resource Division (IRD) . The website of NBRprovides information about paying income tax including the tax rate.


Who should submit Income Tax Return?

If total income of any individual other than female taxpayers, seniortaxpayers of 70 years and above and retarded taxpayers during the incomeyear exceeds Tk 2,20,000/-.

If total income of any female taxpayer, senior taxpayer of 70 years andabove and retarded taxpayer during the income year exceeds Tk 2,50,000/-.

If any person was assessed for tax during any of the 3 years immediatelypreceding the income year.

A person who lives in any city corporation/paurashava/divisional HQ/districtHQ and owns a building of more than one storey and having plintharea exceeding 1,600 sq. feet/owns motor car/owns membership of a clubregistered under VAT Law.

If any person subscribes a telephone. If any person runs a business or profession having trade license.

Any professional registered as doctor, lawyer, income tax practitioner,Chartered Accountant, Cost & Management Accountant, Engineer, Architectand Surveyor etc.

Member of a Chamber of Commerce and Industries or a trade Association. Any person who participates in a tender. A person who has a Taxpayer's Identification Number (TIN). Candidate for Union Parishad, Paurashava, City Corporation or Parliament.

Last date of submitting of Income Tax Return for Other thanCompany30 th September in every year.

For Corporate tax return submission date are 6 month alter from the date ofcompanys accounting year ended.
http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.ird.gov.bd/http://www.ird.gov.bd/http://www.ird.gov.bd/http://www.nbr-bd.org/


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Consequences of Non-Submission of Return imposition of penalty amounting to 10% of tax on last assessed income

subject to a minimum of Tk. 1,000/-

In case of a continuing default a further penalty of Tk. 50/- for every day ofdelay.


Income on which tax has already been paid :

When calculating the tax due, you need to work out whether or not you have

received any income on which tax has already been paid. For example,interest on savings in a building society or bank account, where the interestis paid to you after the bank/building society has taken the tax off it.Payments from an occupational pension will also have had tax taken offbefore the payment is made to you.

When working out the total tax due for the year, you need to take intoaccount the fact that tax has already been paid on this income. This income(which needs to have the tax deducted added back in) will also counttowards taxable income on which personal tax allowances are allowed.


National insurance contributions

When checking whether your tax has been correctly calculated, it may alsobe useful to calculate the national insurance contributions that you have to

pay, as this will give the figure for your take-home pay. National insurancecontributions are calculated on gross income. National insurancecontributions for employees are deducted at different rates depending onyour pension arrangements and on your level of income.

For help in calculating your national insurance contributions in order to workout your take home pay, an experienced adviser should be consulted, forexample, at a Citizens Advice Bureau, whose address and telephone number


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will be in the local telephone directory. To search for details of your nearestCAB, including those that can give advice by email, .

Record keeping

If you are a taxpayer, you must keep records of your income to enable youto complete a tax return. Personal or non-business records must be keptuntil 22 months after the end of the tax year that they relate to, andbusiness records must be kept for five years after the fixed filing date.

Assessment procedureHow HM Revenue and Customs collects income taxDeduction of tax at source

Only a minority of taxpayers pay tax directly to HM Revenue and Customs(HMRC) every year. The majority of taxpayers pay their tax throughdeductions that are made from their income before they receive it. This iscalled deduction at source .


Collection of tax by Self Assessment

Tax may have to be paid to HMRC direct by Self Assessment where the full

liability was not, or cannot be, met by deduction at source. This may occurwith, for example:-

earnings from self-employment rental income from property interest received gross, for example, on National Savings investments

accounts income from overseas fringe benefits received by employees and earnings of employees

where an insufficient amount has been paid under Pay As You Earn(PAYE).


Where tax needs to be collected by Self Assessment, for example, becauseyou are self-employed, a tax return form must be completed. You can theneither ask HMRC to calculate the tax due based on the figures in the tax


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return (revenue calculation), or can calculate the amount of tax due yourself(taxpayer calculation).

Paying tax under Universal Self Assessment U/S 82BB

If we have completed a tax return, we will usually be sent a statement ofaccount, which is like a tax computation sheet, when the tax is due. the fullamount of tax are to be paid with the tax return, if we see the amountalready paid as advance tax which is excess of tax liability than we can claimthe refund of access tax which we paid as advance. This is the advantage ofthis section. Before insert this section the assessee were only entitled toenjoy the section (Under self assessment scheme) if the income is higherthan the previous income and no refund was claimed under that rule. In theyear 2007-08 the above section were inserted.

DUE DATE FOR PAYMENT The due dates for advance tax payment are as follows:-

1 st installment within 15 t September

2 n installment within 15 t December

3 rd installment within 15 th March

4 th or final installment within 15 th June

It is to be noted that, who will pay advance tax:

Who is liable to pay advance tax? U/S. 64 & U/S. 68

a) In the case of an old assesses, advance tax is payable on thebasis of either regular or provisional assessment for the latestincome year. If any assessment is completed before 15 May ofthe year in respect of an income year, that would be the basisfor computation of advance tax.

Regular assessment means an assessment made U/S - 83(assessment after hearing). Re-assessment made U/S 93 (incomeescaping assessment) is not a regular assessment. If however, totalincome excluding capital gain and agricultural income for latestassessment year does not exceed Tk. 3 lac BDT no advance tax inpayable.


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b) An estimate of income other than capital gain and agriculturalincome together with estimated tax liability has to be sent toconcerned DCT by any person not previously assessed by way ofregular assessment. When such estimated income exceeds Tk. 3lac in the income year, such estimate must be sent within 15 th

June in each financial year. Where the assessee who has notbeen previously assessed fails to make an estimate and payadvance tax, interest would be chargeable. He may furtherbelieve able to penalty for submission of untrue statement ofadvance tax which he knew or had reason to believe to beuntrue.

Among direct taxes, income tax is one of the main sources of revenue. It isa progressive tax system. Income tax is imposed on the basis of ability topay. The more a taxpayer earns the more he should pay''- is the basic

principle of charging income tax. It aims at ensuring equity and social justice.

Income Tax Authorities:

Income Tax Authorities are :-

National Board of Revenue, Director General of Inspection (Tax), Commissioner of Taxes (Appeals), Commissioner of Taxes (LTU) Director General (Training), Director General Central Intelligence Cell (CIC), Commissioner of Taxes, Additional Commissioner of Taxes (Appeal/Inspecting), Joint Commissioner of Taxes(Appeal/Inspecting ), Deputy Commissioner of Taxes, Assistant Commissioner of Taxes,

INCOME TAX IN BANGLADESH


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Extra Assistant Commissioner of Taxes, Inspectors of Taxes.

Sources of Income:

For the purpose of computation of total income and charging tax thereon,sources of income can be classified into 7 categories, which are as follows :

Salaries Interest on securities Income from house property Income from agriculture Income from business or profession Capital gains Income from other sources.

Tax Rate (Assessment Year- 2012-13) :

Other than Company :

For individuals other than female taxpayers, senior taxpayers of 70 yearsand above and retarded taxpayers, tax payable for the

First 2,20,000/- NilNext 3,00,000/- 10%Next 4,00,000/- 15%Next 3,00,000/- 20%Rest Amount25%

For female taxpayers, senior taxpayers of age 70 years and above andretarded taxpayers, tax payable for the

First 2,50,000/- NilNext 3,00,000/- 10%Next 4,00,000/- 15%Next 3,00,000/- 20%RestAmount

25%


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Minimum tax for any individual assesses is Tk. 3,000

Non-resident Individual 25%

(other than non-resident Bangladeshi)

For Companies

Publicly Traded Company 27.5%

Non-publicly Traded Company 37.5%

Bank, Insurance & Financial Company 42.5%

Mobile Phone Operator Company 45%

If any publicly traded company declares more than 20% dividend, 10%rebate on total tax is allowed.

Tax Rebate for investment :

Rate of Rebate:

Amount of allowable investment is either up to 20% of total Taxable incomeor Tk. 1,00,00,000/- whichever is less. Tax rebate amounts to 10% ofallowable investment.

Types of investment qualified for the tax rebate are :-

Life insurance premium Contribution to deferred annuity Contribution to Provident Fund to which Provident Fund Act, 1925

applies Self contribution and employer's contribution to Recognized Provident

Fund Contribution to Super Annuation Fund


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Investment in approved debenture or debenture stock, Stocks orShares

Contribution to deposit pension scheme Contribution to Benevolent Fund and Group Insurance premium Contribution to Zakat Fund Donation to charitable hospital approved by National Board of Revenue Donation to philanthropic or educational institution approved by the

Government Donation to socioeconomic or cultural development institution

established in Bangladesh by Aga Khan Development Network

Who should submit Income Tax Return ?

Among direct taxes, income tax is one of the main sources of revenue. InBangladesh Income tax is imposed on the basis of ability to pay. The more ataxpayer earns the more he should pay - is the basic principle of chargingincome tax. It aims at ensuring equity and social justice.All individuals and companies in the country need to pay income tax if theirannual income excess certain limit determined by the Government. Thereare some conditions for paying Income Tax which are controlled by Tax Lawsand Amendments in Bangladesh.

If total income of any individual other than female taxpayers, seniortaxpayers of 70 years and above and retarded taxpayers during theincome year exceeds Tk 2,00,000/-.

If total income of any female taxpayer, senior taxpayer of 70 years

and above and retarded taxpayer during the income year exceeds Tk2,25,000/-.

If any person was assessed for tax during any of the 3 yearsimmediately preceding the income year.

A person who lives in any city corporation/paurashava/divisionalHQ/district HQ and owns a building of more than one storey andhaving plinth area exceeding 1,600 sq. feet/owns motor car/ownsmembership of a club registered under VAT Law.

If any person subscribes a telephone. If any person runs a business or profession having trade license. Any professional registered as doctor, lawyer, income tax practitioner,

Chartered Accountant, Cost & Management Accountant, Engineer,Architect and Surveyor etc.

Member of a Chamber of Commerce and Industries or a tradeAssociation.

Any person who participates in a tender. A person who has a Taxpayer's Identification Number (TIN).


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companies or any other organization specified by law are legally authorized

and bound to withhold taxes at some point of making payment and deposit

the same to the Government Exchequer. The taxpayer receives a certificate

from the withholding authority and gets credits of tax against assessed tax

on the basis of such certificate.

But in these context there are some problems in connection

with assessment in law which is described in short hereunder

and Criticism on some deduction as TDS and which is treated as

final discharge of tax

liability U/S 82C of ITO 1984:

I. On import stage Tk. 3% is deducting from assessable value and aswell as it is treated as final discharge This is completely abad law:-How it has determine that the profit is fixed , Manyorganization has various nature of business and there GP(Gross Profit )Rate is different and some times they acquire even loss also. But inthis stage it is confirmed that profit is fixed on the basis of AIT (

Advance Income Tax) deducted at sources.On the other hand many organization secure much more profit thanthe assessed profit , but no tax is imposed against there undisclosed /unstated profit in the return. Hence for the sake of justice there shouldnot be such type of Law.

2. Section 19(24): Here main question is that what is first ? Egg or Hen? This is also a bad law. Because all the payment against purchase ofshares of a newly registered company should be paid through Banking

Channel. How it possible ?. When a company born it means theRegistrar of Joint Stock Companies & Firm signed that this company isnow registered it means all the paid against the stated shares alreadybeen paid. And after paid the full amount against the stated sharesThe Registrar signed as a New Company. But Income Tax Law all thepayment made must be through banking channel. After completion all


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5. Section 19)27) : Its also a bad law. The company can notpurchase any car or transportation higher than their 10% of thepaid up capital. If so the excess amount will be treated as in from

other sources U/S 19(27). What is the law ?. If the companytransportation company what they will do. Being their businessnature is transportation and as well as there income source is fromtransport so have to purchase vehicles whereas in this nocompany is entitled to purchase vehicles only 10% of their paid upcapital.

6. Section 31 : Computation of Capital Gain In the Fiscal year 2012-2013 a new Law has inserted that if an income has arrived fromsale or disposal of capital assets say Land, Flats etc the seller has topay gain tax in the time of disposal over registration and that is thefinal discharge of tax liabilities. But in this section if sale are less than5 years from the date of acquisition it will treated as revue gaini.e. gain the difference between sales and purchase will betreated as revenue gain not as capital gain. So here what willbe impact an assessee when he/she wants to sell or dispose theassets for special purpose or to meet up an expenses which willbe used for treatment or marriage.

Above all these are the some of total problem at a glance, but

much more various problems in implementation are also in

practical field.

So, from above what is the way to relief and how to boost up

Tax and Tax field, so that The Govt. can recover much moor tax

in the revenue sector :


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In Bangladesh how many tax payees, not mentionable. Why:

1. Much people is less interest to pay Tax,

2. Tax Environment

3. Transparency of Tax Recovery Authority

4. Proper Guidance to Tax Payers

5. Lack of Encouragement

6. Tax Avoidance Tendency

7. Systems Problems

8. Tax Rate

9. In Efficiency of Tax Authority

10. Tax Payment Systems

11. Fraudulence

12. Tax Evasion

13. Wrong Statement

14. Lacking of knowledge of Tax Recovery Officer

15. Tax law

Much people is less interest to pay Tax,

In Bangladesh maximum people do not want to pay Tax. They

are taking all the facilities from Govt. but they are not ready to

pay tax. To recover the Tax from such type of people muchmore campaign is required regarding tax payment and social status and

all other facilities. First of all a step should be taken to raise tax payers in

numbers.


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Tax Environment

Some people are ready to pay the actual tax, But due to environment

they are not paying tax or they dont want to go to the tax net. Govt.

should have to take proper initial to create environment so that people are

interest to pay tax. Govt. have to take much initiative that people will be

interested to go within tax net.

Transparency of Tax Recovery Authority

The tax authority must be transparent so that tax payee will encourage to

pay tax. In some cases there is a scenario that tax is Tk. 5,000/- where as

speed money is Tk. 10,000/- . If the transparency has come in the tax

assessment systems much people will be interested to pay tax.

Proper Guidance to Tax Payers

Maximum people does no know what is the tax, how to pay tax, what

amount will be the tax. and how it will be paid and who will guide to pay this

tax. Govt. will have to take necessary steps by the way of advertisement,

cultural program, seminar, national award, Merits and de merits, Encourage

to pay tax and all other facilities.

Lack of Encouragement

What is the facilities, what will be future, what will be the development and

infrastructure, what will be social status, what will be benefit etc shouldmake awareness in the people so that they can feel much interest to pay

tax. There is a different to be made in the people who pay tax and do not

pay tax and not only that to avoid in socially those who are not paying tax

even those who have income over tax limit.


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Tax Avoidance Tendency

There are huge number of people who intent not to pay tax or to avoid the

tax in proper. In this case people are always try to go in a illegal way byway short payment or without payment. In methodically there is way toavoid huge tax by payment of little bit tax not in a evasion of tax. Say Threeyears earlier, if anybody purchase a flat or a space and he/she pay tax onthe basis of square meter no question will be asked the source of fund in theinvested amount. But this law is not in force in now. So it is also taxavoidance not evasion. It means any body can took this opportunities by payof tax on that law. That was not avoidance of tax that was a scope for thepeople who have undisclosed income. Actually it was an opportunities to the

peoples who had undisclosed income. Any way in Bangladesh maximumpeople has intention to avoid the tax. So Govt. are to be taken initiative sothat people are intend to pay tax and to come tax net.

Systems ProblemsTax payment systems is the major problems of the Govt. to less collection oftax. In First world peoples goes to tax office to collect refund vouchers. InBangladesh No such type systems are force in law. Say:All payment shouldbe under TDS systems,All Salary and wages should be paid through banking

channel.All Purchase will have to be kept with TDS & VATAll payment will bemade in banking channel. All retail payment will also be made by theelectronic card i.e. Debit or Credit card.Centrally Control Systems.Allpayment will made with the support of Tax Identification Number (TIN)Andthe TDS will goes against that TIN and National Board of Revenue will keptrecords for every TIN and TDS will be debited from the Account of deductingauthority automatically.All retailer have to maintain Electric Cash Recordsystem (ECR).No Cash payment or Received will be accepted.

All bank will keep record all the transactions record of client and will sent toNBR against the stated TIN Otherwise bank will much more penalize.No bank account will open until a TINAll people or any person will be entitled to get a TIN within 10 minuets offilling of application.A central data bank will have to be kept for an individual TIN.


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think to put any wrong information in return filling and as such the revenuewill increase automatically.

This will apply for Bank: When a person open a bank account the authorityof bank should have to take the TIN of an account holders. And all the

information will be sent to NBR ( In data bank of account holder which isstated in the TIN) and as a result no body will success to escape from anyundisclosed bank account, not only that the will not success in avoid to showany interest or like other income.

Tax Payment Systems

The Tax payment systems should be very much clear and concise and wayshould be very easy. If an assessee wants to pay any tax he/she will just

informed to his/her bank and the bank will directly deposit the same by wayof debiting his/her account.

Fraudulence

To avoid fraudulence no challan or pay order will be used. Only bank transferwill be accepted to pay tax. If the challan and pay order are omitted toreceived the tax the fraudulence will reduce.

Tax Evasion & wrong Statement

Dishonest people always try for tax evasion . To avoid tax evasion all theauthority should be alarmed in connection with assessees business, incomenature, statement of income etc. So that they can not give any wronginformation or mislead statement. Maximum times the dishonest assesseealways try to eves the tax by way of wrong statement submission. In thisstage the assessing authority must be alarmed in all the way of Skill ness,Professional Knowledge as well their expertise in the tax field. Actuallyprofessional and tax law is a factor to gear up the recovery. If there anydeficit the expected recovery will not come into force. So to boost up therecovery the assessing authority must be sincere, Professional skill, Lawexpert and to be honest. The proper law implementation will increase thecollection and on the other hand wrong implementation of law will creatediscrepancy to collect the revenue. It will create hazard, time passing, andwill inflate the personal pockets. Not will increase the govt. treasury. Sobefore doing any assessment there must be some pre caution:

1. The submitted statement by the assessee is correct or not?2. The submitted statement is proper or not ?3. The submitted statement is true and fair ?


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4. Is it similar with latest law or Rule ?5. The supporting documents is real or not ?6. The connecting support is correct ?7. Any expansion or reduce in connection with last year8. Is it similar with his database which is kept by the tax office.

After consideration all this stated information the assessment work will startin a proper way of law, Proper section of law, Transparently assessed therevenue can increase.

To increase the revenue of the govt. here some consideration to be acceptedfor the recovery officer. Say:

** Sufficient Remuneration.** Ensure of Education of their children** Medical treatment support.** Fooding and Accommodation.

All other necessary supports, So that they encourage to do the jobwith honesty by there professional skill and expertise.

Some recommendations how to Maximize the Govt. Revenuefrom Tax is as follows:

A survey to be obtained how many people will be under tax net. So instant

TIN will be issued for every person who have upper limit of the tax . InBangladesh so far total Number of TIN issued is not less than 23 lac , butevery year how much people have filled their tax return. No properinformation is there, Not only that proper law also not impose why they arenot filling the Return in every year. In the last Ass. year so far only 20 to22 Lac have filled their income tax return. In Bangladesh the totalnumber of TIN holder should be at least 2.00 crore, in Dhaka city thatshould be so far 1.00 to 1.25 Crore TIN holder. Because the presenteconomic scenario is saying that. At present the living cost of medium family

as per living standard in Dhaka city not less than Tk. 50,000/-. So they havethat capacity to maintain the living standard . So they should be under Taxnet. There percentage is not less than 50% of total population of the cityand from them TIN holder should be at least 10,00,000. On the other handUpper Class family is 7 to 10% of the total population. If I think that totalpopulation is 1.5 Crore so, Upper Class TIN holder should not be less than


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10%. In this stage Upper class TIN Holder should be 2,00,000. But howmany Tax payers are in the Dhaka city, Why, and where this problems tocreate this TIN holder. Actually, Lack of Sincerity , In efficiency, Lack ofTransparency, Lack of willingness, Lack of Systems etc. By this time The

Govt. of Bangladesh also urged to NBR to set up target 50 Lac TINHolder in the next 2017-2018. Its my opinion that it is very muchpossible to achieve the target within 2014-2015 if the NBR started inquire bymaking of special team with a honest and sincerity. Actually increase of TINholder as well as Tax payee is depended on the honest, accountability,sincerity etc. If the team do the works with that aim the number of TINholder will increase off course and as such huge tax will be collected fromthe new TIN holders.How much Building along with how much flats in thatbuilding and what is actual rate of rent.How many cars in the city ( ThoroughBRTA) and every car owner will pay extra tax for their car. ( It may adjustwith regular Tax) even though it is running but it will much higher thatpresent rate.How many other Transport Small, Delivery van, Tri cycle etc.Every vehicles will come under tax net. Assets Transfer Tax- The value oftransfer of an assets is not up to the mark. i.e. the value much more lowerthat the actual price. A committee should be formed by the support localrepresentative to evaluate the real value of the assets.A Mobile Tax teamwill always run in the area to check all sorts of business transaction and theywill empowered to impose tax instantly, But that tax will be paid throughbank transfer not in cash.ECS ( Electric cash register ) should be maintainedby the all retailer.All the transfer will have to be registered, Before that thetransfer tax should be given earlier otherwise no transfer will not register.All sorts of deed of agreement will be come into fore by way of register.Without registration no deed will be accepted. And a certain fee to bedeposited before registration on all sorts of deed. TIN will have to bemandatory for all land, Flats, shop etc. owner. Otherwise no electricity orgas and common facilities will be connected.To apply for Trade license, Bankaccount, other account with any financial institution, and any other govt.office must have TIN.Every TIN holder must have file their annual incometax return whether he/she has taxable income or not.All payment frombusiness house must through, no cash transaction will be allowed. If failed ,will be penalized. Not only that TDS should be deducted ( where applicable).Other wise no such payment or expenses will allowed.A special team willhave to be formed. This team will act any inquiry any time any place anyorganization any places of the city. They will empowered to check all sorts of


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transaction, records, TDS and all other necessary documents and evidencesif required otherwise they will empowered to impose penalty instant.

These systems for all Municipal City. But other than Capital, Municipal City

there are huge numbers of people who have huge Income to pay tax, butthey are out of tax net. To cover up the tax net of that people, tax areashould be expanded to the Upazilla, Thana, even union parishad also. InRural area maximum people who will be under tax net does nit know what istax, how to pay tax, why they will pay tax, where they will pay tax, what isthe benefit of tax. To Boost up the tax net much campaign, advertisement inlocal area, tax station establish, tax consultation station, tax officer depute,tax office establish etc should be done very quickly so that people can getfacilities regarding tax and also they can get proper information and supportto pay tax.


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Conclusion Though the rate of tax revenue is to GDP is very negligible, despite the

government is trying to maximize its tax revenue through different method.But the government should also remind the cannon of convenience while

collecting tax from assesses.

As we are living in a civilized society - should come forward to pay taxes to

government in order to conduct the administrative, defense and

development activities of the country. Otherwise we would not be able to

prove ourselves as civilized people.

Tax is the most important in the hand of the government to control the

economy as well as the inflection. It also helps in push money to the

economy, develop certain source of the economy and control some other

activities of the economy. No Government can run its and perform

administration works without collecting tax as a source of revenue. So, the

Government imposes tax over the company and the corporations. On the

other hand Government can also intensive to the infant and certain basicindustry for protection through its tax policy.

Referance :

i. http://www.nbr-bd.or gii. Book BANGLADESH INCOME TAX (Nikhil,Zakaria,Faridul)iii. http://en.wikipedia.org/wiki/Taxation_in_Bangladesh

The END
http://www.nbr-bd.org/http://en.wikipedia.org/wiki/Taxation_in_Bangladeshhttp://en.wikipedia.org/wiki/Taxation_in_Bangladeshhttp://www.nbr-bd.org/

Short Berif on Bangladesh Tax Syster

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Transcript of Short Berif on Bangladesh Tax Syster