The oft-repeated statement in official circles that out of over 160 million of our people, the registered number of taxpayers is only about 1.2 million or per cent of the population, is blatant misinformation

Bangladeshis generally are not tax evaders

Recently, the National Income Tax Day was observed on 15th September. The event was followed by a week long Income Tax fair. The fair has become a regular feature in recent years and among other steps taken by the National Board of Revenue (NBR), reflects the incumbent government’s greater initiatives to harness progressively greater and greater amounts of revenues to fill the government’s coffers. Indeed, the total amounts yielded as various forms of direct and indirect taxes have nearly doubled government’s revenue earnings in the last five years.
Thus, government has been able to spend more and more on government’s routine non developmental expenditures  as well as for developmental expenditures. The size of the national budget has more than doubled in the last five years showing higher yields from taxation helping the government’s various spendings.
   A government needs resources to take up various projects and programmes in the social and developmental sectors. The resources in large measures are supposed to be mobilised as taxes given by people and organisations. But it is frequently alleged that in Bangladesh, the taxes collected by the government in different areas are pitiably low compared to the potential. For instance, newspapers brought out special supplements on the occasion of the National Income Tax day in which it was highlighted that in a country of over 160 million people, the registered number of taxpayers is only about 1.2 million or 1% of the population.
However, on close examination, it would be seen how unfair this statement is in real terms. There are about 1.2 million registered tax payers who pay income tax. But there are millions of bank deposit holders in the country and interests that accumulate against their deposits are taxed by the government periodically. A huge amount of money is obtained by the government from such deduction from interests received by  bank account holders and the sum is probably bigger than the entire sum government gets directly from payment of  income tax.
  Then there are the indirect taxes. Indirect taxes are ones which are added to the prices of goods or services, for example, value added tax (VAT) and it is impossible for any class of consumers to ultimately avoid paying them. VAT  is realised the moment price for a good is paid or a service consumed.
Importers pay customs duty and manufacturers pay excise duties to the government. Ultimately,  importers and  manufacturers pass on the costs of these payments to the end users of their products by charging them extra in proportion to the duties they provide to the government. The point is members of the entire population in one way or the other have no choice but to pay these indirect taxes. Let us not forget that even 31.5 per cent of our over 160 million people or some 50 million of them who are considered as having an existence below the poverty line, they too are not exempted from paying indirect taxes when they pay for certain essential commodities or services.
So, it is neither objective nor fair to say that average or common Bangladeshis on the whole are escaping the payment of taxes altogether in some form or the other. The escapists are unscrupulous sections of the rich or the very rich who hardly declare their true income or wealth to avoid paying taxes in right proportion.
Also citizens also have points to raise about government not spending their tax money as efficiently as it should. For example, owners of motor vehicles annually provide a big sum to the government as road tax. Ideally, the amount they pay as road tax should be spent on proper repairing and maintenance of the roads round the year. But what are the actual experiences of the motorists? The pot-holed roads are an unchanging characteristic of Dhaka city. Instead of being able to drive their vehicles smoothly on these roads, the commuters only suffer from  the repair costs of their vehicles as they  are compelled to use such roads.
  Let us look into another area. Citizens are regularly paying conservancy tax, holding tax, etc., to the government. But what services they are getting in return for their tax money ? There is hardly need to explain if one looks at the appalling scenes of filth and squalor all around in many places of  Dhaka city to find the answer.
It  calls for realization --where it matters-- that only squeezing people harder and harder to pay more and more taxes is hardly doing justice when the former see no appropriate deliveries of services or utilities to them in return for paying taxes. There are also aspects to be considered in taxing businesses harshly as the same may backfire and demotivate them from expanding their activities or even to maintain their current level of activities. The same then impacts adversely on jobs, income and economic growth in general.
Already, the tax-payers are being exploited in cases such as like paying double or triple income tax. Even after paying his income tax on earnings from job or business, a person is, thus, obligated to pay another so-called income tax for maintaining a car. Besides, if he or she has savings certificates, then too, he or she has to pay an income tax on their interest accruals. But many of the saving certificate holders are persons of modest means –pensioners, housewives who could build small nest eggs from regularly sacrificing current consumption, etc.
Furthermore, dividend earnings from share-holdings of companies are also subjected to income tax at personal level, even though such dividends are paid out of post-tax profits of the companies. If the companies would not have paid taxes on their profits, more dividends could be paid out to their share-holders and the same, received as dividends income, could be subjected to payment of income tax at the personal level. The issue of 'double taxation' would not have arisen here in that event.
Under the present circumstances of  inflation, such incidence of multiple taxation on income must be seen as unfair to the majority of the eligible but not rich taxpayers.
It needs to be borne in mind also that that a relatively smaller number in the otherwise vast population of the country are in any shape to go on paying well  higher rates of  indirect taxes like VAT attached to purchase prices of essential goods and services.

The writer is Associate Editor of  theindependent. E-mail: [email protected]/ [email protected] 

The oft-repeated statement in official circles that out of over 160 million of our people, the registered number of taxpayers is only about 1.2 million or per cent of the population, is blatant misinformation

Bangladeshis generally are not tax evaders

Recently, the National Income Tax Day was observed on 15th September. The event was followed by a week long Income Tax fair. The fair has become a regular feature in recent years and among other steps taken by the National Board of Revenue (NBR), reflects the incumbent governments greater initiatives to harness progressively greater and greater amounts of revenues to fill the governments coffers. Indeed, the total amounts yielded as various forms of direct and indirect taxes have nearly doubled governments revenue earnings in the last five years. Thus, government has been able to spend more and more on governments routine non developmental expenditures as well as for developmental expenditures. The size of the national budget has more than doubled in the last five years showing higher yields from taxation helping the governments various spendings. A government needs resources to take up various projects and programmes in the social and developmental sectors. The resources in large measures are supposed to be mobilised as taxes given by people and organisations. But it is frequently alleged that in Bangladesh, the taxes collected by the government in different areas are pitiably low compared to the potential. For instance, newspapers brought out special supplements on the occasion of the National Income Tax day in which it was highlighted that in a country of over 160 million people, the registered number of taxpayers is only about 1.2 million or 1% of the population. However, on close examination, it would be seen how unfair this statement is in real terms. There are about 1.2 million registered tax payers who pay income tax. But there are millions of bank deposit holders in the country and interests that accumulate against their deposits are taxed by the government periodically. A huge amount of money is obtained by the government from such deduction from interests received by bank account holders and the sum is probably bigger than the entire sum government gets directly from payment of income tax. Then there are the indirect taxes. Indirect taxes are ones which are added to the prices of goods or services, for example, value added tax (VAT) and it is impossible for any class of consumers to ultimately avoid paying them. VAT is realised the moment price for a good is paid or a service consumed. Importers pay customs duty and manufacturers pay excise duties to the government. Ultimately, importers and manufacturers pass on the costs of these payments to the end users of their products by charging them extra in proportion to the duties they provide to the government. The point is members of the entire population in one way or the other have no choice but to pay these indirect taxes. Let us not forget that even 31.5 per cent of our over 160 million people or some 50 million of them who are considered as having an existence below the poverty line, they too are not exempted from paying indirect taxes when they pay for certain essential commodities or services. So, it is neither objective nor fair to say that average or common Bangladeshis on the whole are escaping the payment of taxes altogether in some form or the other. The escapists are unscrupulous sections of the rich or the very rich who hardly declare their true income or wealth to avoid paying taxes in right proportion. Also citizens also have points to raise about government not spending their tax money as efficiently as it should. For example, owners of motor vehicles annually provide a big sum to the government as road tax. Ideally, the amount they pay as road tax should be spent on proper repairing and maintenance of the roads round the year. But what are the actual experiences of the motorists? The pot-holed roads are an unchanging characteristic of Dhaka city. Instead of being able to drive their vehicles smoothly on these roads, the commuters only suffer from the repair costs of their vehicles as they are compelled to use such roads. Let us look into another area. Citizens are regularly paying conservancy tax, holding tax, etc., to the government. But what services they are getting in return for their tax money ? There is hardly need to explain if one looks at the appalling scenes of filth and squalor all around in many places of Dhaka city to find the answer. It calls for realization --where it matters-- that only squeezing people harder and harder to pay more and more taxes is hardly doing justice when the former see no appropriate deliveries of services or utilities to them in return for paying taxes. There are also aspects to be considered in taxing businesses harshly as the same may backfire and demotivate them from expanding their activities or even to maintain their current level of activities. The same then impacts adversely on jobs, income and economic growth in general. Already, the tax-payers are being exploited in cases such as like paying double or triple income tax. Even after paying his income tax on earnings from job or business, a person is, thus, obligated to pay another so-called income tax for maintaining a car. Besides, if he or she has savings certificates, then too, he or she has to pay an income tax on their interest accruals. But many of the saving certificate holders are persons of modest means pensioners, housewives who could build small nest eggs from regularly sacrificing current consumption, etc. Furthermore, dividend earnings from share-holdings of companies are also subjected to income tax at personal level, even though such dividends are paid out of post-tax profits of the companies. If the companies would not have paid taxes on their profits, more dividends could be paid out to their share-holders and the same, received as dividends income, could be subjected to payment of income tax at the personal level. The issue of double taxation would not have arisen here in that event. Under the present circumstances of inflation, such incidence of multiple taxation on income must be seen as unfair to the majority of the eligible but not rich taxpayers. It needs to be borne in mind also that that a relatively smaller number in the otherwise vast population of the country are in any shape to go on paying well higher rates of indirect taxes like VAT attached to purchase prices of essential goods and services. The writer is Associate Editor of theindependent. E-mail: [email protected]/ [email protected]