National Board of Revenue (NBR) Chairman Abdur Rahman Khan has said a million out of 1.5 million taxpayers have submitted zero returns online in the ongoing fiscal year.
This means that these one million taxpayers paid no taxes against their declared annual income as it fell below the tax-free income threshold.
Abdur Rahman made the revelation at a pre-budget discussion in the Rajashwa Bhaban, or Revenue Building, in Agargaon on Monday while responding to a proposal to raise the ceiling for tax-free income.
During the session, ERF President Daulat Akhtar Mala proposed increasing the tax exemption ceiling for individual taxpayers from Tk 350,000 to 500,000 in line with inflation.
The NBR chairman acknowledged that while the demand was not "unreasonable", it presented some challenges.
"With online return filings, we have access to all the data. Today, I saw that 1.5 million tax returns have been filed. We're receiving 2,000-3,000 submissions every day. We're still accepting online returns... revised returns as well. This has made things much easier."
"Upon reviewing the data, I noticed that out of 1.5 million returns, 1 million reported an income below the Tk 350,000 threshold. That means two-thirds of them didn't pay a penny in taxes. It's the same for paper returns and everywhere from towns to villages."
He believes raising the tax-free income limit to Tk 400,000 would simply swell the number of zero-tax returns by another 100,000 due to the lack of "quality tax-payers".
"We will discuss [raising the tax-free limit], it's not that we won't. I'm simply saying that the big chunk of people who paid minimum taxes would fall into the zero-tax category as well. That's the problem," he added.
The issue of excise duty on bank deposits discouraging people from keeping their money in some banks was brought to Abdur Rahman's attention.
When asked whether the excise duty and tax on profits could be cut, he assured that the next budget would offer some relief on this matter.
He acknowledged that some people take out loans for business but end up losing money to bank deductions. While he agreed that taxing such sources before income was "irrational", he explained that these policies were introduced to boost revenue collection. "Some [tax] reductions will be made this time," he said.
"What I heard from all businessmen seemed very logical and our policy is actually a bit aggressive to boost tax collection."
He continued, "We also took advantage of the situation. We adopted policies but did not increase operational efficiency or strengthen measures to spot [tax] evasion."
Abdur Rahman clarified that the excise duty on bank deposits and tax on profits would not be lifted "all at once", but a message would be sent that the authorities were keen on "gradually lowering" these taxes.
"We'll provide some relief. For instance, we'll tell banks to not impose any charges on loans. We'll also ask them to lower the tax on deposits." �"bdnews24.com
