VAT+Income Tax=double taxation on the professionals August 31, 2007Posted by bdoza in BANGLADESH, Budget, ECONOMY, Income Tax.
Tags: Budget, Income Tax, VAT
When the Budget for 2007-2008 was declared and it introduced the VAT for the professionals including doctors and lawyers to give VAT on their income, the ordinary citizen thought that from now on the professional will give only VAT on their professional income at the rate of 4.5%.
The ordinary citizen thought that it will lessen the harassment of the professionals by the Income Tax staffs and officials.
In reality, the ordinary citizen found that the professionals will have to give double tax. On the one hand, they will have to give VAT on his professional income on monthly basis, then again Income Tax on his total income including the professional income on yearly basis.
Then why this double taxation on the same item ? If you say that the VAT is usually to be paid by the customers or clients, then professional will impose the tax on their clients. On the other hand, the Heath Adviser urges the doctors not to impose the tax on their clients. The Text enclosure from the VAT office also instructed the professionals not to show the VAT separately in the invoice given to the clients or patients.
If the VAT is to be given by the public, patient or client, then a moral question will come up: why authority is imposing tax on a distressed person for a service he/she is seeking, who is already burdened by the extra expenditure.
It is not acceptable by any sense that a person will have to give double taxation on the same income. If Government think that VAT is the better way of collecting taxes, then it could separate the professional income from the salary and other incomes> To increase the revenue, the Govt could increase the tax net by including all the professionals and involves the professional bodies and cross linked the paid tax to different financial benefit such as bank loans, house building loans etc.
Professional bodies can play important role in expanding the tax net: no membership should be allowed to the professional bodies and no membership should be renewed by the professional associations and regulatory bodies without TIN number and tax payment(in case of doctors, these are BMA and BMDCs).
Government should consider the fact and avoid the double taxation. Otherwise it will create a gap between the professionals and the Government.
An ordinary citizen