Paying tax with little benefit | The Daily Star
12:00 AM, November 21, 2018 / LAST MODIFIED: 12:24 AM, November 21, 2018

Paying tax with little benefit

Citizens complain at tax tribunal

Fazlur Rahman, a 43-year-old man, stood up and began to narrate an incident in which his mother fell ill four years ago. 

Finding no available bed at a public hospital, he took her to a private clinic. A week later, he was handed a Tk 55,000 bill, which is quite an amount for someone like him with limited means of earning.

“As a citizen and taxpayer, I would like to know why in the massive budget of Tk 4.64 lakh crore basic services like education and health for families like mine are not included,” Rahman said while tabling his petition to a mock tribunal termed 'Citizen's Tax Tribunal' yesterday.

ActionAid Bangladesh (AAB) organised the tribunal at Nawab Ali Chowdhury Senate Bhaban Auditorium of the University of Dhaka.

The hall was almost at full capacity and Rahman was the fourth person to place a petition before a tribunal comprising a panel of amicus curie, jury, panellists and people giving testimonies.

“Why do I have to pay for such services out of my pocket when they are constitutionally recognised as basic needs?”

Rahman, who works for a private organisation, said he pays income tax every year and also contribute to the state coffer by paying indirect tax through consumption of various goods and services.

In return, he thinks he gets less from the state and his frustration got reflected when he questioned the reason behind the government's inaction on rent control.

“Why is house rent increased every year without any justification? If the government does not take any step to correct these, why should I pay tax?”

Rahman's previous petitioners also had similar grievances.

Shahadat Hossain Shagor, a student of Government Shaheed Suhrawardy College in Dhaka, cited Article 17 of the constitution that states education was free and mandatory for all young people.

But his family had to pay everything related to his education and count value-added tax on several educational materials as well as transport.

Excluding tuition fees, my family pays on an average Tk 400 as VAT per month, which comes to about Tk 5,000 in a year, he said, adding that his parents had to meet additional expenses by giving up on some services.

He demanded that the government cuts down the VAT on essential products and increases the allocation for education, health and safety nets.

“After paying rent and utility bills and purchasing basic necessities, I am left with hardly anything from my monthly salary of Tk 8,000. Every month, it is the same struggle to meet my family's needs,” said Fatema Begum, one of the 40 lakh garment workers, while tabling her petition before the tribunal.

 Along with the prices of essentials, the rent is also going up at the same rate.

“Additionally, I am burdened with indirect taxes such as VAT. This has further increased my monthly expenditure. But has my wage increased? Has the number of service providing institutions increased given the increasing urban population?”

The owners of garment factories get a lot of benefits from the government such as export incentive, reduced tax and bank finances.

The benefits owners receive are significantly more than what they pay as tax, she said.

“Why do we not get any benefit from these incentives? Why do I have to fight for a raise? Why is healthcare, children's education and my own security a constant cause of concern for me,” she added.

Fatema Akter, who lives in Korail slum in Dhaka, said the slum dwellers fuel the city by serving as drivers, cleaners, rickshaw-pullers and domestic workers.

“We pay rent and we pay for the electricity and water. We pay VAT for cosmetics, toiletries, medicine and medical tests. VAT is imposed on electronic money transfer and even when we use mobile phones. We vote during elections, but we have limited access to basic public services.”

She went on to question whether the services are adequate compared to the amount of VAT paid by people.

At the tribunal, a petition was also filed by Md Monowar, panel chairman of a union council in Joypurhat, seeking the government's action to stop tax evasion and avoidance by corporate firms.

Citing an AAB research, the petitioner said Bangladesh lost approximately Tk 700 crore through tax breaks in 2013, which could ensure healthcare of 34 lakh people.

DISCUSSION OF AMICUS CURIE

Razikuzzaman Ratan, a central committee member of the Socialist Party of Bangladesh, demanded curbing the flow of illegal funds abroad.

Money that garment owners get are spent abroad, whereas the workers spend the money they earn to buy goods and services from the domestic market and thus contribute to the national economy, he added.

Kazi Maruful Islam, a professor of development studies of the University of Dhaka, echoed them.

Taxpayers do not get adequate public services.

“Money is going to the pockets of vested quarters and is siphoned off.  But the VAT rate is the same for both the rich and poor. This is unfair -- we demand pro-people state, pro-people policy.”

PANELLIST VIEW

Despite the economic growth, disparity between the rich and the poor remains high, said MM Akash, a professor at the University of Dhaka's economics department.

“Growth has not become inclusive,” he said.

On indirect tax, he said it is difficult for one to count the total amount of indirect tax one pays.

“But what a taxpayer gets in return of tax payment needs to be figured out in a transparent manner.”

Between 2004 and 2013, Tk 74,640 crore was siphoned out of the country.

Even if 10 percent of the laundered money could be realised, Tk 7,464 crore would have been collected and that could be used for education and health, he said.

JURY'S VIEW 

Lawmaker Fazle Hossain Badsha said the country was deprived of the development for huge outflow of funds. A list should be made of people who transfer funds abroad and then it should be made public.

“The number of people who evade tax is high. Many doctors and barristers earn a lot but do not pay properly. The tax system must be made just and rational.”

Although a lawmaker, he alone cannot do anything to raise the issues of tax burden and discrimination of common people and fight the corrupt and tax evaders, he said.

“We need a parliament where we can raise the issues of discrimination and pro-people tax system. The tax system is designed in a way that favours the rich.”

Common people suffer for indirect tax, Badsha said.

“Rich do not feel the impact. There will be no problem for them if the rate is increased. I would have changed it if I had the authority,” he added.

After hearing the petitioners and amicus curie, Jury AAB Country Director Farah Kabir said, “We want to pay direct tax. But it is not clear whether the indirect tax we pay goes to the state coffer properly. It appears that it does not.”

She also demanded increasing the collection of corporate tax.

“We demand ensuring education, health and shelter for people. We want a pro-people tax system.”

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