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The deprived September 24, 2010

Posted by bdoza in BANGLADESH, GOVERNANCE, Income Tax, POLITICS.
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A very common scene in Bangladesh is beggars on the streets. The number of beggars increased in huge proportion on Fridays at mosques and during Ramadan and on Eid days. Many of them are disabled of various types, most are destitute in their appearance from child to old across the genders.

The numbers and disability reflect the state of poverty in our country and it also reflect how deprived these people are.

Thoughts pass through my mind-can’t we do something better for these people. Does society or the state bear no responsibility to these people?

Do these people have no right to get a share of the taxes that the citizens pay to the treasury?

To foreigners who travel this country, Bangladesh is also identifying itself as a state of beggars, it is reflected in the different writing in their blogs.

What I think, the beggars should be withdrawn from the streets, be given shelters and be trained in special occupations that suit them, the product could be sold in the market and the living should be subsidized by state treasury and organized by the Social Welfare Department.

In Islam, there is spacial system to look after these destitute- the Baitul Mal where state collects the Zakat and support these poor people. A democratic country could at least be a social welfare state.

But we are seeing little evidence in that respect. Not only beggars, people at large are being deprived from the welfare of the state. A state is supposed to give guarantee to the food, clothing, housing, education and health to all citizens. Security and justice should be added to the list.

In broad sense, Bangladesh could yet not be a state of welfare for the citizens.

An ordinary citizens

Advance Income Tax, NBR and Language of threat June 10, 2009

Posted by bdoza in BANGLADESH, ECONOMY, Income Tax.
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In the last few days we have come across a notice from the NBR in different dailies to submit 4th quarter of Advance Income Tax for the year for the financial year 2008-09.

In the notice the authority asked the taxpayers to submit the tax by 15th of June, 2009 in advance for the 4th quarter along with the payment of the earlier quarters if not paid already.

In the notice, it is threatened that if the tax is not paid in the defined time, the taxpayers will be fined the same amount of money they are to pay as taxes according to the Income Tax Ordinance of 1984, clause 125 and will have to pay interest at the rate of 10% according to the clause 73.

It is common practice that the taxpayers submit their taxes at the end of the financial year usually by the next September, sometimes the time is extended depending on the political situation and natural calamities.

Giving advance payment of taxes should be taken as a good gesture on the part of the citizens and NBR should think how to reward this good citizens.

NBR should in no way talk in the language of threat for failure of advance payment of taxes. If there is any laws and regulations for threat in the Ordinance that should be changed as the language represent the colonial mentality of the pre-liberation era that cannot differentiate between good and bad deeds of the citizens.

The ordinary citizen opines that for payment of advance taxes, not the language of threat but language of appreciation from NBR should be extended.

An ordinary citizen

NBR and incentives for the taxpayers September 3, 2008

Posted by bdoza in BANGLADESH, GOVERNANCE, Income Tax.
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National Board of Revenue (NBR) is continuously giving stress to increase the tax return from the public. NBR chairman Abdul Majid in different meetings and seminars is urging for voluntarily inclusion of one’s name in the income tax returnees. Over the last few months NBR is organising discussion meetings for encouraging different groups of professionals/businessmen to submit their income tax.

Recently NBR declared to nominate 5 best tax returnees in each district and to honour them. It is a practice for long to declare CIP on the basis of annual tax return at national level and to give them different privileges.

But there is no incentive for general tax payers. NBR can easily introduce incentives for the all tax payers by giving them financial support in the form of loan etc from banks and other financial institutions on the basis of tax return. This will create an environment among he professionals and businessmen to pay their taxes and get in return the financial benefit accordingly.

Government should take necessary steps and formulate  regulations to implement the suggestion.

An ordinary citizen

Paying income taxes online April 16, 2008

Posted by bdoza in BANGLADESH, ECONOMY, GOVERNANCE, Income Tax.
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Paying Income Tax is one of most cumbersome and embarrassing jobs in Bangladesh. Though the National Bureau of Revenue (NBR) at different times expressed its good intention to make the system of tax return simplified but people are to depend still on the middlemen of the system. These middle men are the income tax lawyers and at times the officials of the Income Tax office itself.

Income Tax office is one of the most corrupt offices in Bangladesh. TIB should make an inquiry into the corruption of the Income Tax offices in Bangladesh. (more…)

VAT+Income Tax=double taxation on the professionals August 31, 2007

Posted by bdoza in BANGLADESH, Budget, ECONOMY, Income Tax.
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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.

(more…)

Income Tax: to be the symbol of social status June 21, 2007

Posted by bdoza in BANGLADESH, Budget, ECONOMY, GOVERNANCE, Income Tax.
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In the Budget Speech, the Finance Adviser declared that CG will make the Income Tax the symbol of social status.

Nice objective. But before that let us see what the state of Income Tax is.

Now, the Income Tax means something imposed from above. The tax payer feel that Government is imposing income tax without extending due services to the tax payers

Income Tax creates worry to many at the end of the financial year because of the harassment awaiting for them in the tax offices.

Income tax creates a sort of agony in many who feels disturbed to pay extra expenses to the tax offices. It is not that people are not willing to pay but the system is such that they are not feeling easy to pay. It is known that people in the Tax offices are more willing to extract money for them than for the state.

It is felt that the rich are paying proportionally less income tax to the state than common people as he can easily satisfy the office. Compare the stress felt by a richer man to pay Tk. 10000 to the office than paying Tk. 5000 by a middle income man. But consider the loss that is incurred by the state. So richer people can able to dodge larger amount of money by paying extra cashes to the office.

Among the taxpayers, it is not taken as credit –who is paying how much. It is rather opposite- who has dodged how much is taken as credit. Our Governments over the years failed to create a society where higher tax payers are acknowledged and acclaimed.

What benefit Government is giving to the tax payers. Except the label of CIP, I personally know nothing.

The ordinary citizen has some suggestions:

1) Government can consider extending the financial benefits on the basis of Income taxes given by the individuals-such as fixing the amount of loan by the banks and financial institutions on the amount of taxes, etc.

2) let the tax of the individuals be disclosed or publicly known. So that culture develop to compare the taxes, not the income or the wealth,

3) Clean the Income Tax office from corruption so that people of the departmen do not consider it as a department to make illegal money ; Few days back I met an Engineer who passed from BUET and now working as a Deputy Commissioner of Taxes; but why on Earth a BUET Engineer would choose the Income Tax as his career department!

4) Simplify the systems of payment of income tax so that a tax payer does not the need the help of a middle man ( income tax layer or office man ) to prepare his return

5) Gradually electronic payment system may be introduced where the tax payer will pay his taxes through internet which is now followed in developed countries

6) Slim down the Income Tax Department , make it more automated. The unnnecessary staffs has created a negative image of the dematment than doing any good

7) In assessment of the professional income, the help of the professional bodies can be taken. It will be more accurate and rational than the so called of the so called Inspectors, who thrive on their twisted assessment; etc.

Bdoza

Budget, income tax & simplification of payments June 14, 2007

Posted by bdoza in BANGLADESH, Budget, ECONOMY, Income Tax.
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Budget shows that the total revenue receipt for the coming fiscal year has been estimated at Tk. 57301 crore which is 10.8% of GDP. Of the revenue receipts from NBR source will amount to Tk 43850 crore, 8.3 % of GDP while those from non NBR and non Tax source will be to Tk 13451 crore (2.5%) of GDP.

It is said that bulk of our revenue comes from imports. For a sustainable economy this is not desirable. We have to restore our dependence on import bound revenue collection and augment revenue from domestic sources. We also have to reduce import duties on industrial raw materials and capital machinery and even on the intermediate goods to keep the price of commodities within tolerable limits. Therefore we have to increase the revenue from Income Tax and VAT source.

The discretionary power of the tax official is curtailed and the Tax authorities have been instructed to avoid discretionary tax collection policies.

In this Budget emphasis has been laid on simplification of the tax assessment and payment procedures. Transparency and accountability of the department is to be ensured. .

Government like to create an atmosphere in which the payments is viewed as a symbol of social status.

One of the objectives of the tax measures is to induce the tax payers to pay taxes voluntarily.

Some of the measures proposed:

1) enhance tax exempted income limit for individual tax payers from existing Taka 1 lakh 20 thousand to Taka 1 lakh 50 thousand.

2) introduction of ‘universal self assessment procedures’

3) abolish the tax at source on credit card

4) tax holding benefits to solar energy plants

5) tax rebate facilities to the non-residential Bangladeshi investors

Hope that the measures taken by the Government will ease the tax system and help in collecting more revenue from inside.

Bdoza

Agony of a Tax-payer June 6, 2007

Posted by bdoza in BANGLADESH, GOVERNANCE, Income Tax.
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He is a tax payer. He is a mid level professional

He is paying taxes for the last 15 years

Each year, when the time comes for paying taxes, he prepares the return and pay the taxes.

But even after paying taxes regularly, he does not feel comfort.

He always remains in worry that the tax office may not accept his return and may give objection.

He is not worried about the objection. His worries begin after the objection.

He does not know how to overcome this.

He has an Income Tax lawyer to support him. The lawyer prepares all the papers. He is a lawyer with good reputation in the city.

But he finds the lawyer also helpless to the system. He tells his client that ‘the inspector’s assessment is much higher than your assessment’. The client tries to defend himself. He is a responsible professional working with integrity and honesty throughout his life. The Lawyer tells him there is nothing to do. If you want to avoid trouble, you have to give some office expenses. So he gives official taxes and also some extra office expenses. He feels agony in his heart. He is told that there are multiple tables and he will have to pay the office expenses otherwise if the taxes once increased it will have ever increasing effect on the next returns. His honesty becomes disintegrated to the official/unofficial Tax System of his country. He calculates that approximately 50% of his money goes to office expenses.

He is told ‘you have to show 20% increase of your income every year’. He does not make 20% increase in income every year. There is ups and down of his professional income and now it is receding. There are so many causes for decrease of one’s income. But none of the office is going to convince.

He submits his work registers and book of accounts. He is told that figures are forfeited. There is no way to prove himself correct. Their verdict is final.

‘Self Assessment’ seems Greek to him. He finds himself a prey to the greed of the others. An Inspector or a surveyor is more important to the system than him. Probably the surveyor is earning more money than him but there is none to assess the wealth of him or his bosses.

NBR Chairman Mr. Badiur Rahman declared that CG is trying to simplify the system for giving taxes by the people (5 June 07). We appreciate the idea and hope that the Government will lessen the agony of the taxpayer and make the system more transparent and effective.

The ordinary citizen feels sympathy for the poor taxpayers of his country.

 

Bdoza

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