NBR falling short

Bangladesh's tax-GDP ratio is one of the lowest in the world and at the bottom in South Asia. Only 7.5 lakh people submitted their income tax returns this year although more than 23 lakh hold taxpayers' identification numbers.
A huge publicity and extension of time twice for paying tax have not done much in a country with 15 crore-plus people.
An 8.5 percent tax-GDP ratio is not enough to push the country towards a middle-income country by 2020. The average tax-GDP ratio is 13 percent in Asian countries and 15 percent in poor Sub-Saharan African countries.
Different studies and estimates show it is possible to raise the ratio by another 2-4 percentage points. Many say Bangladesh has the potential to earn several times higher revenues than the present level.
NBR Chairman Dr Nasiruddin Ahmed has blamed complicated laws and anomalies in operation of the board for the poor revenue collection.
He also blamed thousands of pending cases that he said are hindering the revenue growth.
“Around 18,000 tax evasion cases that involve nearly Tk 8,000 crore in revenue are now pending with the High Court,” said Ahmed.
He said exemption and incentives given to some sectors also led to poor revenue collection.
Ahmed also identified people's unwillingness to pay taxes as another major reason for a poor tax-GDP (gross domestic product) ratio.
The NBR revenue is the main source of internal income of the government. NBR revenues provide sixty percent of the government's annual budgetary expenses.
For the current fiscal year the NBR has fixed a target of collecting Tk 61,000 crore in revenue with 16.24 percent growth. The overall revenue collection by the NBR was Tk 52,476 crore in fiscal 2008-09.
Many including government policymakers often blamed inefficiency of tax officials for poor performance of the NBR.
The prime minister's Economic Adviser Dr Mashiur Rahman has recently said many of the appraiser officials at the NBR cannot understand a company's account.
Fariduddin Ahmed, an NBR member, said some 400 inspectors (appraisers) out of 1,000 are unable to understand today's global business, integrated business system and products.
The government had to appoint pre-shipment inspection companies for a lack of efficiency of the revenue officials.
Corruption is also blamed for poor revenue collection. “If we pay Tk 10 as tax, the equal amount we have to pay as bribe,” said a top industrialist.
Can the taxpayers duck all their responsibilities? “No,” said a managing director of a leading first generation private commercial bank.
He cited the example of a businessman who has personal assets worth Tk 150 crore to Tk 200 crore, but paid only Tk 2 lakh in taxes.
Good news is that the NBR is undergoing some reforms and simplifying taxation. But the NBR chairman said the reforms are going slow because of a lack of cooperation from stakeholders.
The reforms already made are: Automation of the Chittagong Customs House and Large Taxpayers Unit and online tax payment system.