The National Board of Revenue is set to determine the value of land in Dhaka and Chittagong to ensure fair value of properties and taxes for the government, its Chairman Md Ghulam Hussain said yesterday.
“We have already got clearance from the prime minister and finance minister in this regard. It is possible to determine the value under income tax rules. We are working on it in the coming budget,” he said at a meeting with the Economic Reporters' Forum at NBR headquarters.
Each katha of land in Gulshan and Banani area is sold at Tk 10 crore, but when it comes to land registration the officially fixed value of Tk 52 lakh is quoted to evade tax and stamp duty, he said.
Subsequently, the state is deprived of due taxes from property transfer.
“Irregularities in valuation of land and flat are high,” he said, adding that the real estate sector did not make any significant contribution to the national exchequer although the government extended many facilities to it.
He said the NBR detected some 162,000 homeowners from major cities such as Dhaka and Chittagong were not submitting their tax returns.
“We have asked them for it but they are yet to respond. It appears that we will have to be hard on them.”
The tax collector also plans on ensuring taxes from rented properties. Homeowners will have to rent out land by signing a deed and take rent through cheques, with tax to be deducted at source by the bank.
He also criticised professionals—doctors, lawyers and engineers—for not paying taxes against their actual incomes. Some 90 percent of them do not pay proper amount of tax, he said.
Hussain said there is potential for increasing revenue collection from professionals, which NBR is unable to exploit at present due to shortage of tax inspectors.
The NBR chairman hinted that there will be massive change in income tax in the coming budget, and the reason being that the true potential of income tax is yet to be tapped properly.
Direct tax will be the main source of revenue from next fiscal year, he added.
The gap between corporate and individual income tax would be rationalised, and wealthy people may face higher taxes for buying more than one apartment and cars, he said.
Products that are risky for public health will face higher tax.
Hussain said Bangladesh will have to gradually reduce import duty to liberalise trade in line with World Trade Organisation rules.
The list of items that face supplementary duty would be trimmed from 1,362 to 170 by 2015, he said, adding that the tax collector will lose Tk 600-700 crore as a result.
He also said NBR's modernisation and automation efforts—VAT, income and Customs automation—will take shape next fiscal year.
The NBR chairman is also in favour of giving scope to legalise undisclosed or black money to discourage capital flight.
The revised revenue collection target of Tk 125,000 crore is likely to be met, he said.