Should income tax on agriculture be increased?

While watching BTV news at 10pm a few days ago, I saw Khairuzzaman Chowdhury, Chairman, National Board of Revenue, expressing the government's desire to increase income tax on agriculture. According to him, agriculture constitutes 30 percent of the economy of our country, but income tax realised from agriculture is nil. Therefore, the government intends to devise ways and means for procuring some income tax from this sector.

It is not correct to say that under the existing income tax act, no income tax is at all realised from agriculture. Under the present income tax provisions, income solely derived from agriculture is exempt from payment of income tax up to Tk 40,000 only.

This means income from agriculture exceeding Tk 40,000 is liable to income tax. Again, if a person's income is partially derived from agriculture, his extire amount of income is assessable to income tax. For example, say a person's income from agriculture is Tk 30,000 and his income from house rent in Tk 90,000, then he is to pay income tax on Tk 90,000+Tk 30,000=Tk 1,20,000. This is simply not just.

The agriculturists of the western countries are by far richer than our agriculturists. Yet these countries, especially the USA, are giving huge subsidies to the agriculturists. Therefore any attempt to increase the existing income tax on agriculture by lowering the said taxable limit of Tk 40,000 will be unreasonable, inane and unkind to the agriculturists of our country.

If the government is so adamant as to increase revenue by way of income tax, it should explore other avenues, which will be more plausible and justifiable. One such avenue will be to increase the existing income tax rates. It may be recalled that before independence in 1971, the highest rate of income tax as far as I remember was 14 annas in a rupee or 87.5 percent, which has been reduced to 25 percent at present. So, in order to reduce the income gap between the rich and the poor of our country, the maximum income tax rate may be raised to 65 percent, as follows:

No income tax on income up to Tk 1,50,000; income tax at the rate 10 percent on income from Tk 1,50,001 to Tk 4,00,000; at 15 percent on income from Tk 4,00,001 to Tk 7,00,000; 20 percent on income from Tk 7,00,001 to Tk 10,00,000; 25 percent on income from Tk 10,00,001 to Tk 14,00,000; 30 percent on income from Tk 14,00,001 to Tk 18,00,000; 35 percent on income from Tk 18,00,001 to Tk 22,00,000; 40 percent on income from Tk 22,00,001 to Tk 26,00,000; 45 percent on income from Tk 26,00,001 to Tk 30,00,000; 50 percent on income from Tk 30,00,001 to Tk 35,00,000; 55 percent on income from Tk 35,00,001 to Tk 42,00,000; 60 percent on income from Tk 42,00,001 to Tk 50,00,000 and 65 percent on income above Tk 50,00,000.

In 1947, and even in 1971, we had a few very rich persons. But now a section of the people has become prodigiously rich while the per capita income of the general mass has increased very little. In our country it is almost impossible to become very rich without dishonest means. But unfortunately our governments seemed to patronise these dishonest, rich persons by allowing them to whiten their black money without raising any question!

Many of the rich persons of our country have little administrative ability, they threat their employees almost like surfs, sacking them any time without giving any opportunity to explain their position or even assigning any reason. Our rich people build posh houses, lead a luxurious life, in the name of business avail frequent foreign trips, and many of them purchase houses in foreign countries and even keep large amount of money in foreign banks. So, we should have little sympathy for them, and a people's government is supposed to fully endorse the suggestion to increase the maximum rate of income tax to 65 percent on income above Tk 50,00,000.

Mohammad Mujibur Rahman is a retired Collector of Customs.