Proper use of taxpayers’ money to encourage people to pay tax
Md Bashir Uddin Ahmed, member (tax administration and human resource management) of the National Board of Revenue, talks about the idea behind the tax fair and current tax collection situation in the country in an interview with New Age on Saturday. Interviewed by Jasim Uddin and Ahmed Shawki
New Age: What is the idea behind the income tax fair?
Md Bashir Uddin Ahmed: The idea behind the income tax fair is to educate people about the necessity of paying tax for the country’s development. It is a duty of a citizen to pay his/her tax. But, in our country people have negative attitude towards paying tax. The income tax fair is a way to connect people, encourage them to pay tax, increase awareness about paying tax and ensure effective views exchange with the tax officials.
NA: Do you think that the income tax fair is playing role in creating awareness among people about paying tax?
Bashir Uddin: Of course, it is. The number of visitors in the fairs has been increasing every year. The taxpayers who visited the fairs in the previous years and received help from the taxmen in filling in return forms are doing the job by themselves this year. They became well informed about the necessity of paying tax and learned how to pay tax and other things. In last year, around 3.5 lakh people took services from the fairs and we are expecting more than 6 lakh people will visit the nationwide fairs this year (September 22-26) across the country. But, there is no room for complacency and we have to work more to reach the doorstep of people over the issue.
NA: Why people have negative attitude towards or negligence in paying tax?
Bashir Uddin: There are so many socio-cultural issues behind the negative attitude and negligence. People in our country like to spend more than their earnings which puts them in a scarcity of money for paying tax. It is also true that the culture of the government offices in this country is not service-oriented. We are yet to prove that government facilities are available for its citizens through regular procedure. So, people are reluctant to visit government offices unless they are bound to do that. The same goes for the tax offices. Through this fair we are actually educating both sides. The tax officers are also learning that their duty is to help people in paying tax. At the same time people are also learning that paying tax in not doing a favour to the government rather it is a duty.
NA: Do you think that effective use of public money will encourage people to pay tax?
Bashir Uddin: I think so. The government needs to prove that they are using the taxpayers’ money properly. If people see that their money is being used for their well-being, they will be encouraged more to pay tax. The more people pay tax the government will be able to spend more money in development activities. Paying tax will also make the people’s voice strong and the government accountable.
NA: It is said that taxation system in the country is not progressive one. What do you think?
Bashir Uddin: In the progressive taxation system, people who earn more should pay more tax. The system is followed in most of the developed countries. In the countries there are income tax rates as high as 40 per cent for individual against comparatively lower corporate tax rates. But, in Bangladesh people, both individual and businesses, usually try to evade tax through hiding income. The revenue board prefers to introduce progressive taxation method gradually.
NA: Are you satisfied with the number of taxpayers?
Bashir Uddin: Absolutely not. At least 60 lakh people should pay income tax every year considering the size of the economy and middle-class people in the country. But, only 12 lakh people paid income tax in the last fiscal year. To bring them under the tax net, the NBR has been arranging tax fairs to create awareness among people, enhancing intelligence activities to prevent tax evasion, easing tax payment system and reducing harassment by creating taxpayers-friendly environment at the tax offices. The NBR has introduced online generated taxpayers’ identification number and online tax payment system. From the next fiscal year we will introduce online submission of income tax returns.
NA: What is the present scenario of income tax collection in the country?
Bashir Uddin: Though the contribution of income tax to the total revenue is very low in the country, it has been increasing every year. In the last few years, the NBR exceeded its target in collecting income tax.
In 2012-2013, the contribution of income tax to the total revenue collection was 31 per cent which is expected to raise 36 per cent in the current fiscal year. The contribution of income tax to the total revenue is around 70 per cent in the developed countries.
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