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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

Budget, IT & e-governance June 13, 2007

Posted by bdoza in BANGLADESH, Budget, ECONOMY, GOVERNANCE, TECHNOLOGY.
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It is said that tele-density per 100 persons in our country has increased from 9 in the last fiscal year to 18 now. But the Government has imposed duty on mobile phones. Does it mean that Government does not like the expansion of the mobile phones to the common people? Expansion of the mobile phones not only indicate increase in number of the sets as expansion of connectivity means expansion of business

It is said that the illegal business of Voice Over Internet protocol (VOIP) has been stopped. The policies for bringing VOIP business under legal framework are going to be finalized soon.The accuracy of the decision on VOIP will affect its utility in future.

To augment export earnings, IT products have been identified as one of the priority export products. But the products were not mentioned which were identified and how the export would be augmented not clarified in the Budget.

Internship allowances is being given to create an efficient workforce in IT sector.The volume of the allowance will determine its effect.

The ICT incubation centre was established to enhance the capacity of the ICT companies.

Infrastructure development work has begun to build a hi-tech park. But when work would be finished and initial service will begin was not mentioned. It looks as if it will not start by the endof the the fiscal year. West Bengal already started its 2nd IT park.

Creation of an IT Equity Entrepreneurship Fund with Taka 100 crore is underway. How the fund would be best utilized was not mentioned.

There is plan to establish a computer lab in one school of each district. But the ordinary citizen recommends taht every school of the country should have atleast one computer in the school

A one year post graduate course on IT has also been in the universities. Advanced skill in IT sector should have to be developed. More programmere and IT experts are to be produced to get the share of the world market. Bangladesh may be developed as an outsource of world market.

An allocation of Taka 1899 crore, which is 2.4% of total budget and 12 percent higher than the revised budget has been proposed for Information, Telecommunication and Information Technology sectors in the next fiscal year. We hope that the allocated money would be utilized properly.

Withdrawal of zero duty on computer and computer accessories was proposed and 5% duty was imposed. This will increase the prize the computers and its accessories and affect the computersation process of the country.

Withdrawal of zero duty exemption on telecommunication equipment and liquid dielectric transformer and to increase duties on this item to bring this at per with VOIP equipment and other transformers was also proposed.

No where in the budget the term e- governance was used and no vision was projected to introduce or enhance e-governance.

Bdoza

Post Script: 17 June 2007

Experts on NTV the other day was telling that it takes months to approve a project in ADP because of file moves so slowly in Bangladesh. Here we need the e-governance. If the secretariat is endowed with technical support, then from the very first day , all executives could follow the movement of the files or a project and take necessary steps.

One of the hindrance is that though in theory no body is against automation, computerisation and e-governance, but very few of our senior executives specially in public sector are conversant with this technologies.

But it is not difficult to overcome. Bangladeshi people are very technological- spread of mobile phone proved that. What is needed is a firm and sincere decision from the Government and a little practical support to the users.

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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