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High-income professionals under NBR watch

Jasim Uddin

The National Board of Revenue has asked income tax commissioners to examine the sources of income and expenditures of professionals, including doctors, lawyers and engineers, who, the board suspects, hide their actual income in order to evade taxes.
Tax commissioners have also been instructed to find out any kind of hidden transactions made by professionals using credit cards and by other means in and outside the country.
At a meeting last week with the commissioners of the 31 income tax zones of the revenue board, NBR chairman Ghulam Hussain instructed them to start work to this end. A written instruction would be issued in this regard in a day or two, officials said.
 ‘Doctors, lawyers, engineers, chartered accountants and other professionals earn a lot of money through private practice but most of them show less income in their income tax files in order to dodge tax,’ a high official, quoting NBR chairman’s instruction, told New Age on Monday.
In most of the cases, they earn several times higher than their fixed salaries and allowances, if any, he said.
Tax officials will inspect the workplaces of professionals in metropolitan cities, municipalities and economic growth centres to know about their sources of income and expenditures to make a proper assessment of their actual income for tax collection, he said.
He said that NBR’s field offices would also conduct random audit of the tax files of professionals to detect tax evading ones and bring them under the tax net.
According to the NBR instructions, tax officials will also scrutinise credit card transactions to detect tax dodging as most of the professionals use such advanced instruments of transactions.
The NBR observed that most of the high-income professionals send their children abroad for study and spend a large amount of money on their education but usually hide these transactions in tax files.
The NBR chairman has also instructed the commissioners to find out such hidden transactions to detect untaxed money, officials said.
For example, doctors in private practice charge patients hefty fees, they get a handsome amount of money as commission from diagnostic centres for prescribing pathological tests and earn a lot of money by conduction surgery, they said.
A specialised doctor earns at least Tk 10,000-Tk 20,000 every evening from private practice by visiting just 20-30 patients at the rate of Tk 500-Tk 800, NBR officials estimated.
He gets at least 30-40 per cent as commission from diagnostic centres for prescribing pathological tests while charges huge fees for conducting every operation, officials of the NBR said.
‘No one knows about the fees of lawyers. So we have to depend on his/her disclosure,’ a high NBR official said.
But people, more often allege that lawyers charge fees that does not match their disclosure at the NBR, he said.
Though NBR does not have any evidence of professionals’ additional income or the amount of money they evade as tax every year, it is widely believed that they earn much more than their fixed salary and allowances but hide it from the NBR.
The NBR in the past took several initiatives to check tax evasion by the professionals but failed due to lack of seriousness in implementing the initiatives. 
But this time, the income tax authorities have taken the matter seriously as it has lagged far behind in collection of revenue against the target for the first six months of the current fiscal year.
Moreover, the government has instructed the NBR to raise the target of revenue collection by Tk 8,000 for the current fiscal year.
The NBR, which is under pressure to increase revenue collection, fell short by more than Tk 3,500 crore against its revenue collection target for July-December.
The board has set a revenue collection target of Tk 1,12,259 crore for the year.



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