Honest and diligent taxpayers have urged the government to bring more people under the tax net as they think there were many more still taxable.

But that will not be an easy task if the fear of harassment by tax collectors is not allayed, they said.

Their comments came yesterday on the sidelines of a ceremony honouring 141 highest taxpaying individuals and companies for their sincere contribution towards the development of the country.

The National Board of Revenue (NBR) organised the programme at Pan Pacific Sonargaon Dhaka in a bid to encourage compliance so that the state can accomplish financing its development goals through domestic resources.

Guests at the programme. Photo: Star

Bangladesh, with its economy growing by more than 7 percent a year, lags behind other developing countries in generating domestic revenue owing to tax evasion.

The Centre for Policy Dialogue recently said only 32 percent of people with taxable income pay tax.

The NBR data shows that the number of registered taxpayers and return submissions have been rising in the last couple of years. Yet, just over one percent of the population submit annual income tax returns now, which had hovered below one percent for several years.

Bangladesh's tax-GDP ratio, a measure of the state's capacity to finance its expenditure, stands at 9 percent whereas the developing country average is 15 percent.

“Tax net should be increased. It appears that the number of people with taxable income is higher than the number of people paying tax,” said KM Tanjib-ul Alam, who was honoured in a category for lawyers.

He said he does not pay tax for earning fame.

“I pay tax based on what I earn. There are many lawyers who earn more but pay less tax than me,” the young lawyer said questioning the culture of tax evasion in Bangladesh.

“It appears that there is a tendency among the super rich, why are they not on the top taxpayers' list?” said Alam.

NBR Chairman Md Mosharraf Hossain Bhuiyan presents a memento to Finance Minister AMA Muhith for his “extraordinary contribution to tax collection” at a ceremony at Pan Pacific Sonargaon yesterday to recognise 141 highest taxpaying individuals and organisations. Photo: Star

The income tax department should win the confidence of people, he said, adding that there were allegations of many taxmen compelling taxpayers to engage in corruption.

Architect Iqbal Habib, who once again became a top taxpayer in architect category, said professionals were not inclined towards paying taxes as many take it as a wastage of money in view that a lot of public money was misused.

“There is also a role of income tax lawyers. Many tax consultants misguide professionals into refraining from disclosing their actual income. As a result, professionals are not coming forward,” he said.

Standard Chartered Bank Bangladesh CEO Naser Ezaz Bijoy receives an award on behalf of the bank. Photo: Star

“Many of my friends take the issue of tax card (the NBR's recognition of tax compliance) lightly when I share it on social media. It appears that many think I am a fool,” he said.

“But tax payment and proper compliance is not a choice. It is obviously something that one must do. In other countries, non-payment of tax is a crime. Several Padma bridges could be built if all paid taxes properly, he said.

Noted actor Abul Hayat, who was honoured with a tax card in artist category, said compliance was gaining ground among the populace, as reflected in the number of income tax returns being submitted.

Yet the level of awareness about the need to pay tax remains low. It seems that the revenue board is yet to motivate people by informing them about the benefits of tax payment. It is also necessary to reduce fear among people about taxmen, he said.

Md Moktar Hossain, who once again got a tax card as top taxpayer in accountant category, said multinational companies usually do not evade tax.

Problems may remain regarding local companies, he said, adding that one of the reasons behind this absence was tax audits.

“Tax audit should be introduced as part of efforts to increase the scope of the tax net. The existing practice of test audits should be replaced by thorough tax audits so that accountants can conduct examinations in detail. This can initially be introduced on a pilot basis,” he said.

Khandker Badrul Hassan, who was honoured as a top taxpayer in senior citizen category, said a large number of taxable people do not pay it.

“NBR's capacity should be strengthened. Its manpower is low compared to the expansion of the economy. Tax offices should be established up to the upazila level,” he said.