NBR's online tax system floundering
With much enthusiasm, a big foreign bank filed its tax returns online just after the Large Taxpayer Unit (LTU) launched its electronic system in 2009.
Three years later, it returned to the manual system.
That was not a unique case. Most companies that had signed up for the e-filing system at LTU of the National Board of Revenue returned to the old method.
About 11 firms submitted returns online last fiscal year, according to NBR, down from 33 in fiscal 2009-10, when the LTU scheme was launched to ease taxpayers' hassles.
Similar is the fate of another e-filing initiative launched by one of NBR's field offices, Tax Zone-8, in 2010. The venture had initially attracted a good number of taxpayers, but Finance Minister AMA Muhith is the only person who still uses it.
Separately, the NBR opened an e-payment portal in May 2012 to save taxpayers from going to the bank to pay taxes. The system, inaugurated by Prime Minister Sheikh Hasina, failed to attract warm responses from individuals or companies.
Most payments made through the portal were related to income taxes, while payments related to customs duty and VAT remained negligible as scope to pay directly from the taxpayer's accounts is yet to be put in place, said taxmen and other stakeholders.
So far, taxpayers, mainly individuals, paid Tk 2.17 crore through the e-payment mechanism, according to NBR.
The e-ventures taken in the past five years pulled in new attention from taxpayers, as the NBR observes Income Tax Day today ahead of a weeklong tax fair in Dhaka and other divisional cities. Except for online registration of taxpayers identification numbers (TIN), most of the initiatives were half-hearted.
"We hoped that there would be transparency and we would not have to visit the tax officials. But we have to go to LTU with hard copies of documents even after filing returns online," said a senior official of a mobile phone operator, seeking anonymity. “It appears that revenue officials are not interested in considering anything but hard copies.”
With about 350 companies, including banks and mobile phone operators, LTU was NBR's first field office offering the scope to file returns online.
Some of the shortcomings of the e-filing systems include increasing bandwidth, creating options to send tax clearance certificates online, and expediting the e-payment process.
For Tax Zone-8, taxpayers were required to visit the tax offices to get personal identification numbers, prior to submitting returns online. Taxpayers also do not receive tax clearance certificates online; that is why they have to visit the tax offices, said an official of Tax Zone-8.
"Although the authority claims to have online services, the systems are not fully mechanised. Taxpayers who submit returns do not feel comfortable," said Syed Iqbal Mostafa, a tax lawyer.
"We have seen motivational campaigns by the authority for e-filing initially. We do not see anything like that nowadays."
Mizanur Rahman, chief financial officer of NCC Bank, said the scope to open TINs online is beneficial for taxpayers, saving them from hassles. "As a taxpayer, I do not see any major change for us except for opening TINs and receiving TIN certificates online," said an official of a private bank, seeking to remain unnamed as he is afraid of being harassed by taxmen.
Ashim Kumer Biswas, chief financial officer of Jamuna Bank, said the system should be online in the real sense, so that one can complete all tax related formalities sitting in the office or at home.
"If you have an IT-based system, why would you be asked to bring hard copies," asked Ahsan H Mansur, executive director of Policy Research Institute.
He termed most of NBR's online ventures as a 'silo type approach' as initiatives were taken in a scattered manner without any central focus.
"Once someone took the initiative but successors later did not show interest in it. Such a situation would not occur if there was a central approach and monitoring."
Zaid Bakht, research director Bangladesh Institute of Development Studies (BIDS), praised NBR's e-TIN initiative but said, “We are yet to see full-fledged e-filing and online tax payment.” "Overall automation of revenue administration has so far remained more rhetoric. Progress appears to be slow due to a lack of committed push and drive at the implementation level."
Mustafizur Rahman, executive director of Centre for Policy Dialogue, said: "The use of information technology and strengthening of tax administration is necessary to increase revenue collection. But NBR lags in its own plan." IT can help increase the tax net, curb tax evasion and stop capital flight and trade mispricing, he said.
The revenue administration framed a modernisation plan in 2011 and aspired to complete most its automation schemes by July. None of the targets has been achieved.
Md Ghulam Hussain, chairman of NBR, said the past initiatives did not become effective because of their limitations. It is also a matter of sincerity among officials, he added.
"It has been proved that the piecemeal initiatives do not become effective. That's why, we have taken steps to facilitate e-filing centrally. We hope taxpayers will be able to submit tax returns online by next year.”
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