The revenue authority should promote the use of information technology, including online submission of tax and returns, and make them popular among taxpayers
Published in The Daily Star on Tuesday, 22 September 2015.
Tax fair logs in record number of visitors
Fair comes to a close today
Star Business Report
The weeklong annual tax fair is set to conclude today with the highest foot traffic in the event’s six-year history.
In the six days so far, some 6.50 lakh taxpayers have called in at the fair, up already from last year’s total count of 6.49 lakh, according to the National Board of Revenue, the organiser of the event.
Tax collection until the sixth day stood at Tk 1,640 crore, up 25 percent year-on-year.
The number of returns submitted until the sixth day also exceeded last year’s total, which indicates the rising popularity of the event, where a hassle-free environment can be found.
The tax fairs surely contributed towards encouraging people, especially the young generation, to submit returns on time, said Sajjad Zohir, executive director of Economic Research Group, a local research organisation.
The increased foot traffic may reflect two factors: one being that people find submitting returns in tax offices to be a hassle, and the other being the on-the-spot issuance of acknowledgement receipts.
This is the sixth year that the NBR has organised the show with the view to expanding the tax net and increasing compliance.
All forms of tax-related assistance can be found at the fairs as well as on the on-the-spot issuance of acknowledgement receipts for returns submissions.
At present, 12 lakh pay taxes — a number that upsets policymakers, including Finance Minister AMA Muhith.
Of the total population of 16 crore, only 17 lakh have the taxpayer identification numbers (TINs). Muhith plans to raise the count to 40 lakh by fiscal 2018-19 to increase the collection of direct tax, now the biggest source of state revenue.
Zohir said the total receipts may not increase in line with the proportion of expected increase in the number of taxpayers.
“Individuals are in hardships and the local private businesses have also been passing through difficult times. Thus, the size of taxable income of the current taxpayers is likely to fall.”
This may be redressed if the revenue authority ensures that taxes are paid by all foreign agencies working in the country, particularly those engaged in consultancy services.
At present, many take shelter of the tax immunity afforded by various bilateral and multilateral lending agencies.
Subsequently, he recommended the authorities to review the dual tax treaties and the measures that the other countries are adopting to safeguard their interests in this regard.
But tax compliance among individuals, from both the public and private formal sectors, is rising, partly because of the urge to conform to norms, said the ERG executive director.
The main reason is the growing realisation that engaging in other economic activities will be smooth if one is up-to-date on tax payment.
For instance, individuals now have to furnish their TINs to open bank accounts, take out trade licences and get car registration.
Improvements in sharing of data across agencies may have also contributed in this respect, Zohir added.
Towfiqul Islam Khan, research fellow of the Centre for Policy Dialogue, said the rising response reflects that the concept of tax fair has gained popularity among small and new individual taxpayers.
There is no doubt that the fair has contributed to awareness-building among taxpayers, he said, adding that there is also a huge demand to expand such events beyond cities and district headquarters to reach out to more eligible taxpayers.
This year, the NBR held the fair in all divisional cities for a week and 64 districts for four days. The authority has also taken the show to upazilas, one of the lowest levels of the local government. The fair was held in 24 districts and 12 upazilas yesterday.
He said the NBR can consider holding such tax fairs in phases instead of holding it everywhere at the same time.
He however said the medium-term objective of the NBR should be to minimise the number of face-to-face interactions with taxpayers.
The revenue authority should promote the use of information technology, including online submission of tax and returns, and make them popular among taxpayers, he added.
Meanwhile, the NBR held a meeting with editors of the print and electronic media. The editors said the quality of service offered at the tax fairs should be maintained all the year round.