Ahmed Shahin and Belal Muntasir
The National Board of Revenue (NBR) has geared up to finalise the draft of the new income tax law with special focus on the collection of tax revenue online, an NBR source said.
The draft law is being prepared keeping provisions, including e-TIN, e-return submission, e-payment and e-filing, he said, adding that it has also incorporated provisions of penalties for tax evaders, which are imprisonment, financial penalty, and seize of their bank accounts as well as properties.
Once the draft comes as a law, it will replace the existing Income Tax Ordinance 1984, the source added.
NBR source said some strict guidelines have been included in the draft law to foster the tax compliance of large scale industrialists as well as private officials.
The employers, as per the draft law, will be held accountable for the non-compliance of their employees’ tax evasion. Besides, all employees, even if they don’t have the tax-eligible income threshold, will also have to obtain e-TIN while it is mandatory for the tax-eligible employees to submit their income tax returns, he said.
In this case, if any employee of the company, he added, resorts to falsehood on income tax return, the high-ups of the company will have to account for this fraudulence.
An NBR official said the government officials will also be brought under the monitoring system nonce the draft provisions are passed, and as part of the move the revenue authority will verify the income of their wives and children too. Besides, a super tax group of the wealthy people will be made up to collect substantial taxes from them.
The exchequer is likely to keep a provision to collect taxes from the house owners, that is, if any house owner has an income from house rent amounting to Tk 25,000 or more they must open a bank account to operate the procedure, he said.
If any person has an income tax due amounting to minimum Tk 50 lakh and if he does not comply with three NBR reminders a year, he or she will be awarded imprisonment along with financial penalty.
The official said they are now thinking about the tenure of the imprisonment and the amount of financial penalty in this regard.
The NBR, as per the draft law, will preserve the information of income, expenditure, estate property, non-estate property, and tax return data in software. The NBR, by this move will be able to verify the required information in case of tax evasion.
Besides, tax officials will also be able to verify the previous data if they find any suspicious information in the current year’s tax return.
The official concerned said NBR is putting emphasis more on the expansion of tax-net. In line with this move, a unique tax code for each upazila has been kept in the draft law. The tax officials will be able to detect the taxpayer’s location as the upazila code will be added with e-TIN certificate.
The NBR has incorporated a new provision into the draft of the law, a system that the determined tax rate will be kept unchangeable for three years.
The NBR has also put its special emphasis on Alternative Dispute Resolution (ADR) to recover the arrear of income tax revenue.
The finance minister in his budget speech for the current fiscal year hoped that the government would be able to place the new income tax law before parliament at the start of 2019-20 fiscal year.
Currently, Value Added Tax (VAT) is the key driver of collecting the government’s revenue. However, the government has put emphasis on accelerating the earning from income tax regime. The government has already planned to make this regime as top revenue collecting side by 2021.