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আমদানি-রপ্তানির প্রধান বাধা এনবিআর

জ্যেষ্ঠ প্রতিবেদক

১৪ আগস্ট ২০২২, ০১:৫০ পিএম


আমদানি-রপ্তানির প্রধান বাধা হিসেবে এনবিআর ও কাস্টমসকে দায়ী করেছেন বাংলাদেশ নিটওয়্যার ম্যানুফ্যাকচারার্স অ্যান্ড এক্সপোর্টার্স অ্যাসোসিয়েশনের (বিকেএমইএ) নির্বাহী সভাপতি মোহাম্মদ হাতেম। রোববার (১৪ আগস্ট) ঢাকা চেম্বার অব কমার্স অ্যান্ড ইন্ডাস্ট্রির (ডিসিসিআই) আয়োজিত সেমিনার তিনি এ কথা বলেন।

ডিসিসিআই অডিটোরিয়ামে বেসরকারি খাতের দৃষ্টিতে ২০২১-২২২ অর্থবছরের দ্বিতীয় প্রান্তিকে (জানুয়ারি-জুন ২০২২) বাংলাদেশের অর্থনীতির সামগ্রিক পর্যালোচনা শীর্ষক সেমিনার অনুষ্ঠিত হয়। সেমিনারে ডিসিসিআই সভাপতি রিজওয়ান রাহমানের মূল প্রবন্ধ উপস্থাপন করেন।

হাতেম বলেন, অত্যন্ত দুঃখের সঙ্গে জানাতে হচ্ছে, আমাদের আমদানি-রপ্তানির প্রধান বাধা হচ্ছে এনবিআর ও কাস্টমস। আমাকে প্রায় প্রতিদিনই চট্টগ্রাম কাস্টমস, ঢাকা কাস্টমস ও উত্তর-দক্ষিণের কাস্টমসের কমিশনারকে ফোন দিয়ে ব্যবসায়ীকে উদ্ধার করতে হয়। নানা অজুহাতে গাড়ি ও পণ্য আটকে রাখা হচ্ছে। এই জ্বালাতন কেন হবে? অপকর্ম যারা করেন তাদের ধরেন। অপকর্মকারীদের ধরেন, দৃষ্টান্তমূলক সাজা দেন। আমাদের আপত্তি নেই। বন্ড অপব্যবহারকারীদের সাজা দিয়ে সারাজীবনের জন্য বন্ধ করে দেন, আপত্তি নেই।

সেমনারে পরিকল্পনা মন্ত্রণালয়ের প্রতিমন্ত্রী ড. শামসুল আলম প্রধান অতিথি ও এফবিসিসিআই’র সাবেক সভাপতি মো. শফিউল ইসলাম বিশেষ অতিথি হিসেবে উপস্থিত ছিলেন।

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TBS Report 

14 August, 2022, 02:40 pm

Last modified: 14 August, 2022, 02:49 pm

Man held for allegedly laundering around Tk1,400 crore 

Md Shahidul Alam, accused in total 29 money laundering cases, was arrested from the Dhaka airport 



Md Shahidul Alam. Photo: Courtesy

The Customs Intelligence and Investigation Directorate (CIID) has arrested a man for allegedly laundering Tk1,396.14 crore.

CIID nabbed Md Shahidul Alam, 56, from the Hazrat Shahjalal International Airport (HSIA) during a recent drive.

Shahidul, accused in total 29 money laundering cases, was trying to flee to Italy, reads an official press release issued in this regard on Sunday.

According to the release, the arrestee, along with his accomplices, used fake names, addresses, documents, trade licence, TIN, BIN, and IRC to import high-duty liquor, cigarettes, LED TVs, powdered milk, photocopiers, under false import permission of machinery.

The accused used four of his fake companies – Messrs AgroBD & JP, Henan Anhui Agro LC, Hebra Branco and China BDL – to evade huge sums of customs duty and launder crores of money, added the release.

Total nine cases were filed against Messrs AgroBD & JP for laundering Tk439.11 crore. Seven cases each were filed against Hebra Branco and China BDL for laundering Tk290.89 crore and Tk234.39 crore respectively.  

Whereas, six cases were filed against the accused's Henan Anhui Agro LC for laundering Tk429.11 crore. 

Shahidul was shown arrested in one of the cases filed with the Paltan Model police station back in 2019.

He was produced before a Dhaka court on Saturday. The court ordered him to be sent to jail after.

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Reyad Hossain

24 August, 2022, 10:00 pm

Last modified: 24 August, 2022, 10:05 pm

July revenue grows 16% on customs duty 

Economists said hike in the prices of imported goods and inflation were the main reasons behind the increase in year-on-year revenue collection in July

The pace of income tax and value added tax (VAT) collection in July of this fiscal year was slow, but the overall revenue collection increased by around 16% due to almost 38% growth in customs duty collection in that month.

Economists said hike in the prices of imported goods and inflation were the main reasons behind the increase in year-on-year revenue collection in July.

Besides, the import of some products – mainly commercial products with high tariffs – increased slightly in July, said the National Board of Revenue (NBR) officials.

They said customs duty collection increased significantly because many importers were waiting without taking delivery of imported goods to see what happens in the month of budget declaration. As those goods were cleared in July, revenue for them was collected in that month.

Besides, there was a negative growth in customs duty collection in July of FY22. As a result, the growth rate appears higher in the same month of the current fiscal year, compared to the last one. 

Towfiqul Islam Khan, senior research fellow of Centre for Policy Dialogue (CPD), told The Business Standard, "The growth in import duty and VAT is mainly driven by inflation. Hiked prices increased the consumers' expenditure, which in turn increased collection import duty and VAT collections. 

He further said, "The NBR is reluctant to increase revenue collection by increasing efficiency. If it could do so, the tax on some commodities like fuel could be reduced to give relief to consumers."

Sources at the NBR said they collected a little over Tk17,700 crore as customs duty, VAT and income tax in July, which is around Tk3,000 crore less than the target for that particular month.

About Tk31,000 crore has to be collected every month on an average to meet the target of Tk370,000 crore revenue in FY23.

According to sources, the NBR is looking for reasons behind zero growth in income tax collection in July this year.

NBR Chairman Abu Hena Md Rahmatul Muneem will hold a meeting with field level officials today to review the revenue collection situation.

On condition of anonymity, a senior NBR official told TBS that the pace of revenue collection has always been a little slow in the first month of the fiscal year. Besides, there is a pressure to collect more taxes in June to achieve the target of the outgoing fiscal year, which is one of the reasons behind the decrease in revenue in July – the first month of the new fiscal year. 

Muhammad Abdul Majid, former chairman of NBR, told TBS, "Increase in import of some products can be a reason behind the increase in customs duty collection in July, but we have to wait two or three more months to understand whether the import is actually increasing, and which way the trend of revenue collection is going."

According to NBR data, the growth in revenue collection was 4% in July of FY22. In that month, there was a negative growth of 2% in customs duty, 1.37% growth in VAT and 15% growth in income tax collection.

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TBS Report 

01 August, 2022, 09:35 pm

Last modified: 01 August, 2022, 09:35 pm

Ctg customs sees 42.5% growth in July revenues

The collection of Tk4,839 crore is also around 8% higher than the monthly target set this fiscal year



The Chattogram Custom House has registered a 42.56% growth in revenue for July, the first month of fiscal year 2022-2023, relative to the same time last fiscal year, amid a volatile dollar market and other global crises caused by the ongoing Russia-Ukraine war. 

It collected some Tk4,839 crore in July, which is also around 8% higher than the Tk4,482 crore target set for the month this fiscal year. 

In the corresponding month of the previous fiscal (FY22), the House collected some Tk3,395 crore in revenues. 

"The Chattogram Custom has started the new fiscal year with a 42.56% growth in July relative to July of the last fiscal year. It is obviously great news for the country's economy," Joint Commissioner of the house, Salahuddin Rizvi, told The Business Standard. 

Following a proper Harmonised System (HS) of codes and collecting duties based on product values were the key drivers of the growth, he added. 

Salahuddin Rizvi hopes the growth trend will also continue in the coming days of this fiscal year. 

The Custom House collected some Tk59,160 crore in revenue in the previous fiscal (FY22). The target for the ongoing fiscal has been set at Tk74,206 crore. 

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TBS Report

25 August, 2022, 10:00 pm

Last modified: 25 August, 2022, 10:03 pm

NBR fears revenue loss if project implementation slows

The NBR chairman has ordered tax officials to increase field level supervision to increase revenue collection

Slowing the implementation of less important projects in the current fiscal year might have a negative impact on revenue collection, fears the officials of the National Board of Revenue (NBR).

The government has decided to slow down implementation of less important projects to cope up with the decline in the country's dollar reserve.

Besides, collection of value added tax (VAT) from large taxpayers is not going on as per expectations, which was discussed yesterday at a meeting of tax officials presided over by NBR Chairman Abu Hena Md Rahmatul Muneem at the Rajaswa Bhaban in Segunbagicha, Dhaka.

The NBR chairman has ordered tax officials to increase field level supervision to increase revenue collection, said sources present at the meeting.

On condition of anonymity, an NBR member present at the meeting told The Business Standard, "Government expenditure will drop if the implementation of less essential projects is slowed down in the current year. The government used to collect the VAT deducted at source from the material suppliers of these projects. There is a concern that the amount of VAT collected in this way might decrease this year."

According to sources, the issue of drop in VAT collection from a number of large taxpayers including the cigarette companies was also discussed in the meeting.

The NBR aims to collect Tk3.7 lakh crore revenue in the current fiscal year. About Tk1.37 lakh of that amount will be collected as VAT.

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High taxes prevent tourists from coming to Bangladesh

VAT and other taxes on hotels, motels, and goods associated with the tourism industry are much higher than those of other countries


Tribune Desk

August 25, 2022 3:24 PM

Current value added tax (VAT) and other high tax rates were found to be major obstacles to developing Bangladesh's tourism industry, a parliamentary body said on Wednesday.

VAT and other taxes on hotels, motels, and goods associated with the tourism industry are much higher than those of other countries. This is a major obstacle to attracting foreign tourists, said the parliamentary standing committee on civil aviation and Tourism Ministry.

In a meeting at Jatiya Sangsad, with Awami League lawmaker RAM Obaidul Muktadir Chowdhury in the chair, it was said the municipality and city corporation have started the process of collecting holding tax at a new rate and 5% tax from those staying in hotels or motels, which will directly hinder the industry's development.

In the meeting, Bangladesh Parjatan Corporation said tourism is one of the fastest growing sectors in the world. But in Bangladesh, taxes are levied at various levels, including service sub-sectors, such as hotels, motels, restaurants, and amusement parks.

In many cases, taxes are taken from service providers and receivers of the same service, meaning that double taxation is taking place, the organization said.

It was mentioned that Bangladesh Parjatan Corporation has to pay 15% VAT, 5% supply tax on purchased goods, and 5% on the revenue received.

Due to giving so much VAT and income tax in addition to paying salaries and allowances, the existence of the corporation has become impossible, the corporation added.

According to the committee, authorities should take an integrated approach to keep taxes at a tolerable level in all the related sectors, including the various service sub-sectors in the tourism industry.

The meeting recommended taking necessary measures by holding a meeting involving Dhaka north and south city corporations, the Finance Ministry and the National Board of Revenue.

About the obstacles in Cox's Bazar, lawmaker Obaidul said although the 24-hour security system has been beefed up in the location, there is no means of recreation at night, and that is why tourists usually stay in the hotel area.

The committee also recommended demolishing all old infrastructures in Cox's Bazar and building a modern tourist city.

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Power, gas users paid Tk 315.35b taxes in 5 FYs

 DOULOT AKTER MALA |  August 29, 2022 00:00:00


Industrial and domestic consumers of two basic utility services - electricity and gas - paid Tk 315.35 billion taxes to the public exchequer with their consumption charges during the last five fiscal years (FY 2017-18 to FY 2021-22).

The amount is equivalent to the tax revenue collection by the National Board of Revenue (NBR) from all the domestic and import sources in a month.

Economists said tax burden on end-users is higher in Bangladesh, as the existing provisions have less refund or rebate facilities, imposing 'tax-on-tax' on consumers.

According to the NBR data of consumers' tax collection during the last five FYs, the gas consumers paid the major amount of the taxes, as Value Added Tax (VAT) rate was 15 per cent on them.

The gas consumers paid Tk 252.13 billion VAT to the five state-owned gas companies. Bangladesh Gas Field Ltd, Sylhet Gas Fields Ltd, BAPEX, Rupantarita Prakritik Gas Co Ltd, and Petrobangla deposited the consumers' VAT to the public exchequer.

Besides, four power distribution companies collected Tk 63.22 billion VAT at a rate of 5.0 per cent since FY 18 for the public exchequer, the FE analysis found.

Rural Electrification Board (REB), Dhaka Power Distribution Company (DPDC), Bangladesh Power Development Board (BPDB), and Dhaka Electric Supply Company (DESCO) deposited the VAT to the NBR.

VAT collection from the gas consumers grew by 129.52 per cent last year. The power consumers also paid 1.57 per cent higher VAT last year, compared to that of the previous FY.

Dr Ahsan H Mansur, Executive Director of the Policy Research Institute (PRI), said the VAT system is causing escalation of actual tax burden on the end-users.

There must be scopes to obtain VAT rebate, whether it is at uniform rate or not, except some cases - so that the consumers can enjoy the reduced rate.

Actual tax incidences sometimes increased to 35 per cent on the end-users, while 15 per cent is the highest rate of VAT in Bangladesh, he added.

A senior VAT official said they detected that some of the state-owned enterprises (SoEs), involved in providing utility services, are spending their collected VAT for other purposes, violating the VAT law.

Such trend has caused accumulation of a huge amount of arrear VAT lying with the SoEs.

"Consumers are paying VAT with their gas or electricity bills, but it is not properly deposited to the public exchequer in due time."

A huge amount of outstanding revenue with the SoEs is one the main reasons for missing the annual tax collection target, as the target is fixed by estimating collections from these sectors too, he added.

Farid Uddin, former member of the NBR, said tax should be imposed at equal rates to all, irrespective of poor and rich, as per principle of the VAT law. But a question remains whether the country's economic situation supports it or not.

VAT is a regressive tax, which is also slapped on numerous commodities, used by the low-income group of people too - considering the country's internal revenue mobilisation, he noted.

VAT on utility services is refundable or adjustable for the industrial consumers, which manufacture goods. However, the end-users have no option to get rebate on their paid VAT on utility services.

Four power distributing companies paid VAT worth Tk 9.78 billion in FY 18 that jumped by 48.77 per cent to Tk 14.55 billion in FY 22.

Rural power consumers under REB paid Tk 1.34 billion VAT last year. However, their VAT payment declined by 35.44 per cent compared to that of the previous year.

Electricity consumers in some parts of Dhaka city and Narayanganj under DPDC last year paid 10.09 per cent higher VAT worth Tk 4.85 billion, while those under BPDB paid Tk 5.86 billion.

Consumer of DESCO, supplying power in major parts of the capital city and Tongi, paid VAT worth Tk 2.71 billion last year.

Of the gas companies, VAT payment by RPGCL and BGFL declined by 37.05 per cent and 4.40 per cent respectively in last FY.

The five state-owned gas companies paid Tk 32.39 billion VAT last year against Tk 11.11 billion in FY 21.

However, VAT collection from the gas companies was not consistent during the last five years, as cash-strapped Petrobangla failed to deposit VAT regularly on several occasions.

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Abul Kashem

02 September, 2022, 11:05 pm

Last modified: 02 September, 2022, 11:08 pm

Govt readies strategy to recover laundered money



The government is working on a strategy to freeze or confiscate unreported offshore assets soon after their detection, according to a draft guideline awaiting approval of the finance ministry.

The next course of action will be an investigation jointly with countries to where the money has been syphoned off and initiatives for repatriation.

In case of a delay in getting court order to seize the assets, the government via the Bangladesh Financial Intelligence Unit will send a letter of rogatory – a formal request from a court to a foreign court for judicial assistance – to the countries concerned so the laundered money cannot be transferred to another country, according to the guideline on legal framework and strategic process for laundered asset recovery.

The government thinks such plans of action will weaken a money launderer financially, psychologically and socially, and will also limit their ability to influence investigation, which will lead to a prompt and proper investigation.

In the FY23 budget, the government had offered Bangladeshis a scope for legalising their unreported movable assets abroad if repatriated to Bangladesh, subject to paying a 7% tax. But no one has availed this offshore tax amnesty yet.

And, as part of the government's coordinated and effective initiatives to bring back the laundered money, six agencies engaged with checking money laundering such as the Anti-Corruption Commission, the Bangladesh Financial Intelligence Unit, the Criminal Investigation Department, the Bangladesh Securities and Exchange Commission, the Customs Intelligence and Investigation Directorate, and the Department of Narcotics Control have jointly prepared the draft guidelines.

The working committee – constituted for formulating and implementing policies on prevention of money laundering and terrorist financing – has already given its go-ahead to the guidelines, which was forwarded to the finance ministry on 11 August for its seal of approval as well. Later, the draft strategies will be submitted to the national coordination committee on preventing money laundering and combating financing of terrorism, headed by the finance minister, for its consent.

The government has no data on how much money is laundered abroad every year. But according to the US-based think-tank Global Financial Integrity, Bangladesh lost a whopping $49.65 billion or around Tk4,71,675 crore on an average between 2009 and 2015 (except the year 2014), mainly to trade misinvoicing and under-invoicing. On an average, around Tk84,475 crore was syphoned off the country each year during the period.

Bank accounts of many launderers were seized and cases were filed against them under the Money Laundering Prevention Act, but there had been only two instances of bringing the money back since independence.

One was the Tk21 crore, laundered by BNP Chairperson Khaleda Zia's youngest son Arafat Rahman Koko, brought back from Singapore. Besides, of the $81 million stolen from the Bangladesh Bank's reserve, $150,000 from the Philippines and $20 million from Sri Lanka were retrieved as well.

Ghulam Rahman, who was the chairman of the Anti-Corruption Commission when Koko's laundered money was recovered from Singapore, told The Business Standard that the Singapore government and its court had helped Bangladesh a lot in retrieving the money.

Mentioning that Bangladesh's money is mainly laundered to Dubai, Canada, the United States, Australia, Malaysia, Hong Kong and Singapore, he said, "We have to make a bilateral agreement with those countries to repatriate our smuggled money."

When contacted, ACC lawyer Khurshid Alam Khan said, "Switzerland does not provide us with any information on Bangladesh citizens' funds in Swiss bank accounts as there is no bilateral agreement with the country."

Ghulam Rahman said, "We will be able to bring back laundered money following the draft strategies if we ensure an inter-agency coordination."

But it will be difficult to bring back the undisclosed money kept in tax haven countries that will not cooperate much in this matter, he also said.

In the assessment of the Asia Pacific Group on Money Laundering, Bangladesh's legal and institutional framework is of international standards, but it has not been successful in recovering money laundered abroad.

Bangladesh has made many requests for legal assistance to some countries to retrieve the unreported offshore money, but legal processes of those cases now hang in the balance owing to no response for a long time, according to the draft guidelines.

However, according to the ACC's annual reports for 2020 and 2021, the shares of two companies in Dubai and five bank accounts in Malaysia were seized in connection with money laundering following court orders in 2019. Besides, in2021, the ACC froze 21 bank accounts in Canada, 24 in Australia and five in Singapore.

In its annual reports, the ACC said, "The commission is also chasing holders of illegal assets abroad. It is fulfilling its legal responsibility to ensure that no one enjoys money earned beyond known sources of income."
Seizure of assets before conviction

The government will go for non-conviction based confiscation, meaning that it will confiscate laundered assets even before criminal charges are proven in court as the prosecution takes a lot of time, money and effort. Many countries are following this approach. 

If it follows a typical method – first, proving laundering charges in court, then confiscating assets and finally repatriating those, there will be many more complications in the process but a low success rate.

Bangladesh will also form a joint investigation team or taskforce, comprising all relevant agencies or competent persons, to bring back money or assets smuggled abroad. Considering the nature and sensitivity of each case, the investigation team will conduct a joint investigation with foreign authorities if necessary.

The guidelines also state that financial intelligence officers and financial sector experts should be involved at all stages of a money laundering investigation for coordination among the parties concerned from the beginning of a case.

According to the draft guidelines, it is not possible to bring back the money without the maximum cooperation of the countries where the money has been laundered to. In this regard, the government will take assistance from the International Centre for Asset Recovery, the Star Protection Agency and the United Nations Office on Drugs and Crime. 

Besides, the government will give priority to getting mutual legal assistance in countries, such as Switzerland, where access to informal information is limited.

Getting foreign government assistance in recovering laundered money depends largely on the capability of the Ministry of Foreign Affairs, the guidelines also noted.

In the case of the accused is absconding and no charge of criminal offence can be framed against them or if the accused dies before conviction, their assets will be confiscated before they are convicted.  

The same asset forfeiture approach will be applicable if the accused is so powerful that it is impractical to frame a criminal charge against them or if assets are transferred to a third party who is not interested in participating in the hearing against the confiscation of the assets or if it is not possible to collect evidence to prove the offence in a criminal court. 

Former ACC chairman Ghulam Rahman said, "We have to maintain international standards during trial proceedings to repatriate laundered money."

The tracking should be completed fast, otherwise, launderers will move their assets to another country, he added.
Syphoning legally earned money or assets out of the country is a crime according to the law of Bangladesh, but not in laws of many countries, the guidelines said.  

Besides, some countries, while sending back laundered money, make it a condition that part of it be spent on anti-corruption or other public welfare activities.

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Tahreen Tahrima Chowdhury

05 September, 2022, 01:25 pm

Last modified: 05 September, 2022, 01:33 pm

Why the offshore tax amnesty is unlikely to work 

Bangladesh's recent offshore tax amnesty is unlikely to improve the depleted foreign exchange reserve, reverse capital outflow, or decrease corruption and money laundering



Tahreen Tahrima Chowdhury. Sketch: TBS

The Bangladesh Bank has offered tax amnesty against the return of offshore assets by paying a 7% tax. On 18 July, a Bangladesh Bank circular stated that "any form of undisclosed offshore assets can be brought into the country legally through the banking channel between 1 July and 30 June 2023 by paying a 7% tax." 

Furthermore, it was reported that the source of funds to be remitted need not be declared. 

A plausible intention behind the Central Bank's initiative may be to combat the turmoil in the foreign exchange markets arising from scarcity of foreign exchange. 

However, the initiative is open to the criticism that it may permit legitimising illicit funds and eventually act as a disincentive for honest taxpayers. On the other hand, the initiative can also be viewed as a mechanism for encouraging emigrants to bring back their financial assets and savings through legal channels. 

Nevertheless, this may not be effective since the income earnings through legal channels by Bangladeshi nationals in foreign countries can already be transferred to Bangladesh in the form of tax-exempt remittance. Therefore, Bangladeshis who have earnings and assets abroad may not find this 7% tax amnesty to be a lucrative incentive.

Considering the sudden decline in foreign exchange reserves, it is imperative to stabilise the foreign exchange market as soon as possible, but the options available to the policy makers are limited. In light of this, the tax amnesty provided by the government can still be viewed as a well-intentioned initiative. This is a crucial concern at present and it is essential to assess its likely effectiveness, since it is by no means certain, ex-ante, that money launderers will be inclined to send back their illicit financial resources from abroad. 

Prior to the offshore tax amnesty, the government provided a tax amnesty to undeclared domestic earnings several times since independence, but tax revenues through such programs have not increased significantly. 

The percentage of income tax collected from domestic sources as a result of the amnesty compared to the overall collection was not satisfactory: 6.81% in 2007-08 which then fell to less than 1% in FY 2008-09 and FY 2009-10 (0.72% and 0.70% respectively) (Ahmed 2020).

Given the dismal outcome of the tax amnesty on domestic revenues, it is unlikely that the outcome of tax amnesty initiatives on offshore resources will be effective.

Let us consider some facts and issues to assess this concern. It is well known that illicit transfers through illegal channels take place in large amounts. It should be obvious that only individuals and firms with high incomes can avail themselves of such opportunities (cf. Alstadseter et al, 2018).

The Global Financial Integrity Report (GFI, 2021) states that funds are illicitly transferred across international borders "to evade taxes and/or customs duties, launder the proceeds of criminal activity, circumvent currency controls, and hide profits in offshore bank accounts."

If such transfers are indeed meant to evade taxes and trade duties to begin with, the likelihood of reversing capital outflow by means of the offshore tax amnesty seems low.  

It is difficult to estimate the magnitude of illicit financial flows due to its covert nature. GFI carried out this task by examining the latest international trade data, officially reported by governments to the United Nations, by estimating the magnitude of trade misinvoicing. 

GFI calculated the "value gaps" occurring in the global commercial trading system by identifying the "mismatches between what any two countries had reported regarding their trade with each other." 

The annual average total value gap identified in Bangladesh's trade is about $8.3 billion between 2009 to 2018, and amounts to approximately 17% of total trade of Bangladesh (GFI 2021 Report), which also reveals the magnitude of capital flight every year. 

Trade misinvoicing and balance of payment leakages are two channels for illicit financial flows in the developing world. Illicit financial outflows through trade misinvoicing and balance of payment leakages account for 12-17%  of Bangladesh's total trade from 2005 to 2015, of which trade misinvoicing is around 7-12% of Bangladesh's total trade (GFI, 2017). 

Hence, trade misinvoicing is the largest component of illicit financial flows in Bangladesh. 

Against this backdrop, even if the central bank's ambitious approach of tax amnesty functions as intended, and if there is substantial inflow of foreign currencies resulting in significant augmentation of foreign exchange reserve, the shortage of the reserve will be addressed to some extent in the short-run but there is unlikely to be a significant effect in the long-run. 

The currency depreciation has been large and in a short span of about six months it has increased the incentive to resend funds which were transferred since early this year.

However, the present scenario is somewhat different from the previous years. For example, if the funds were transferred when the exchange rate was Tk87 to the US dollar, it could be brought to Tk95 in a short span of time — a high rate of return. 

And, if the benefit of the tax amnesty is included, the return would be even higher. Individuals may be induced to utilise the high return of this short-term capital inflow in significant part to make long-term investments in unproductive real estate assets in the absence of well-structured investment opportunities.

A thriving "hundi" or curb market makes Bangladesh's capital account more open than the policy regime suggests. This implies that foreign exchange traders can drive up the value of the Taka via curb market activity, and at a certain stage drive it back down again, depreciating it.

While such behaviour would normally be expected in an open capital account with a floating exchange rate and market competition, the ups and downs would not disrupt the market given strong monetary and fiscal policies and regulation. However, with weak policies and regulation, it can cause turbulence and yield windfall gains of the sort observed recently.

It is high time the government resolutely strengthened regulatory control as well as executed stern actions against the unscrupulous "money changers." Otherwise, the ability of a relatively small group of traders to cause large swings in the exchange rate can cause greater disruption in the future. The stock market crashes of 1996 and 2012 should serve as reminders.


Ahmed, Sams Uddin. "Tax amnesty schemes in Bangladesh: Some observations." The Cost and Management 48, no. 3 (2020): 35-40. 

Alstadsæter, Annette, Niels Johannesen, and Gabriel Zucman. "Tax evasion and inequality." American Economic Review 109, no. 6 (2019): 2073-2103.

Integrity, Global Financial. "Illicit financial flows to and from developing countries: 2005-2014." Washington, DC (2017).

Integrity, Global Financial. "Trade-related illicit financial flows in 134 developing countries 2009-2018." Global Financial Integrity,(2021).

Tahreen Tahrima Chowdhury is a Research Fellow at the Bangladesh Institute of Development Studies (BIDS)

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Genex Infosys appointed for VAT collection for three years

The firm to install 0.30m VAT collecting machines in Dhaka, Ctg

Published:  September 14, 2022 18:41:00


Genex Infosys Limited, a leading IT service provider, will provide and install 300,000 VAT collecting machines in Dhaka city and its adjoining areas as well as in Chottagram city in the next three years.

Cabinet Committee on Government Purchase (CCGP) at a meeting on Wednesday approved a proposal of the National Board of Revenue (NBR) to select Genex Infosys as a vendor to collect value added tax (VAT) on behalf of the government.

Finance Minister AHM Mustafa Kamal presided over the virtual meeting while members of the committee attended it, reports UNB.

Genex Infosys was selected through an open tender, said the additional secretary of the Cabinet Division Abdul Barik while briefing on the decisions of the committee.

He said the Genex as a lowest bidder won the contract in three lots to supply and install Electronic Fiscal Device (EFD) and Sales Data Controller (SDC) or VAT collecting machines at different types of retail shops.

Earlier, the Cabinet Committee on Economic Affairs gave its nod in principle to this decision of NBR on August 31.

Barik said the vendor will supply and install the machines at its own cost and in return, it will get 0.52-0.538 per cent of the collected money as a service charge while depositing it to the government.

It will also carry out the operation and maintenance work as well, he added.

According to NBR officials, it’s not possible for the government to operate so many machines across the country, that’s why service outsourcing is being done.

However, installation of EFD machines started two years ago but there is not much speed in its operation.

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Jasim Uddin

06 May, 2023, 10:55 pm

Last modified: 06 May, 2023, 11:01 pm

NBR plans to send private agents for tax collection 



Soon income tax agents may appear at your door regularly to collect your taxes. 

The government is considering employing private tax collection agents up to the union levels from the forthcoming fiscal year 2023-24 to boost tax revenue, given the country's tax-to-GDP ratio of below 8%, a low number despite the economic growth over the past two decades.

This move is a part of the revenue boards' strategy to achieve its Tk4,30,000 crore revenue collection target in the upcoming fiscal year, which is 16.2% higher than the current fiscal, according to finance ministry sources.

Corporate tax rates are likely to remain the same in the new budget despite a demand for cuts, while the tax-free income threshold for individuals might be increased to Tk3,50,000-4,00,000 from Tk3,00,000.

According to top officials in the finance ministry, the National Board of Revenue (NBR) has proposed the appointment of tax agents to expand the tax net across the country and persuade persons with taxable income to pay taxes.

At the same time, tax agents will also help new taxpayers or those who have e-TIN but have not yet submitted their returns to prepare their tax returns.

Ministry officials have stated the proposal was discussed in a recent meeting with Finance Minister AHM Mustafa Kamal and will be presented to Prime Minister Sheikh Hasina on 14 May for her approval.

If approved, the upcoming budget will incorporate the finance bill, which includes a new rule named "Income Tax Preparer (ITP)," that has already been developed as a draft.

The implementation of private tax collection agents is modelled after countries like the United States, Australia, and the United Kingdom, according to Finance Ministry officials.

In the USA, tax preparers can prepare, file, or assist with general tax forms and can also represent taxpayers to the Internal revenue service (IRS) – which is responsible for collecting US federal taxes – during audits and tax court issues.

However, former NBR chairman Muhammad Abdul Mazid suggested that the implementation of tax agents should initially be piloted to ensure its effectiveness.

He also expressed hope that the initiative would help reduce fear among taxpayers of tax officials and that the NBR would improve its attitude toward auditing tax returns.

Mazid also noted that the appointment of tax agents would create a significant number of new jobs.

Finance ministry officials explained that in Bangladesh, tax agents would be companies that register with the NBR and appoint income tax preparers. These agents will be trained and monitored to find new taxpayers and help them file their returns, which must be submitted online.

The sources also mentioned that the tax agents will work similar to life insurance company agents and will receive a commission of 10% of the tax collected, excluding tax at source, with a significant portion going to the tax return preparers.

The commission rate will be determined by the appointed agents of the NBR, and the revenue board plans to pay commissions to agents for the next five years in exchange for finding new taxpayers.

Despite having taxable income, many people in the upazila-municipal level of the country are not paying taxes, according to NBR officials. Although there are more than 8.8 lakh tax identification number (TIN) holders, only 2.9 lakh taxpayers have submitted returns in the current fiscal year. 

Ahsan H Mansur, executive director of the Policy Research Institute, however, warned that the NBR's move to appoint private agents might lead to the creation of a "broker class", causing the initiative to backfire. Since commissions from tax collection are their only income, the agents will try to pressurise taxpayers to pay higher amounts of taxes than the payable, or take bribes from them to reduce the amount, he explained.

Alamgir Hossain, a former member of the NBR (tax policy), feels that appointments of private agents in tax collection might be done on an experimental basis to increase the number of taxpayers.

He, however, declined to make further statements on the matter without knowing fully as to how much authority the tax agents will be given.
Which countries have private agents for tax collections?

In Australia, the Australian Taxation Office (ATO) has engaged private debt collection agencies to assist in the collection of certain tax debts. These agencies work on behalf of the ATO to recover outstanding tax liabilities.

In the United Kingdom, the government has outsourced the collection of some tax debts to private companies. These companies are responsible for recovering unpaid taxes, such as income tax and national insurance contributions.

Greece has also utilised private debt collection agencies for the collection of certain tax debts. These agencies operate under the supervision of the Ministry of Finance.

In Brazil, private companies can be hired by local municipalities or state governments to handle tax collection. These companies work alongside the government tax authorities to ensure the proper collection of taxes.

The Internal Revenue Service (IRS) in the United States has used private collection agencies in the past to collect certain overdue tax debts. However, the program has been controversial and has undergone changes over the years.
Individual tax-free income limit will be higher

The NBR has decided to increase the tax-free income limit for individuals after two fiscal years, taking into account the current inflation.

The limit may be raised to Tk3,50,000-4,00,000, pending a final decision by Prime Minister Sheikh Hasina in the meeting scheduled for 14 May. However, the NBR is in favour of maintaining the tax-free income limit at Tk3,50,000, as raising it to Tk4,00,000 could result in many taxpayers falling out of the tax net, ultimately reducing tax collection.

Over the last ten fiscal years, the tax-free income limit has gradually increased from Tk220,000 in FY14-15 to Tk2,50,000 in FY16 and Tk3,00,000 in FY21. The NBR did not increase the tax-free income limit in the last two years in response to demands from various businessmen, economists, and social organisations.

According to a senior NBR official who spoke on condition of anonymity to TBS, increasing or decreasing the tax-free income limit for individuals is primarily a political decision. Therefore, the ultimate decision on the tax-free income limit will be made by the highest level of the government.

Nonetheless, the NBR prefers the limit to be set at Tk3,50,000, as this decision would benefit both taxpayers and the NBR, said the official.
Corporate tax rates to remain unchanged

The corporate tax rates for listed and non-listed and one-person companies are likely to remain unchanged in the upcoming budget, although the rates were slashed in the last three consecutive budgets, according to the sources.

Currently, the corporate tax rate is 20% for listed companies, 27.5% for non-listed companies, and 22.5% for one-person companies.
NBR revenue target Tk4,30,000cr for FY24

Sources suggest that the total revenue collection target for the upcoming fiscal year would be Tk5,00,000 crore, which is 15% higher than the current fiscal year's target and is equivalent to 10% of the country's GDP.

The NBR has been assigned the task of collecting Tk4,30,000 crore, which is 16.2% higher than the current fiscal year.

In addition to the NBR's target, the non-NBR revenue collection target has been set at Tk20,000 crore, and the non-tax revenue (NTR) collection target at Tk50,000 crore.

Former NBR Chairman Muhammad Abdul Mazid stated that while the current fiscal year's revenue target may not be achievable, a high target is not necessarily a bad thing if the government does not increase its revenue expenditure based on it. If the government does so, it may result in increased bank borrowings.

He also suggested that expanding the tax net should be a priority to meet revenue targets, as setting such a high target may put pressure on revenue officers to meet their targets, which could negatively affect taxpayers.

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TBS Report

07 May, 2023, 10:50 pm

Last modified: 07 May, 2023, 11:00 pm

IMF wants to know NBR's specific strategies to increase revenue


The International Monetary Fund (IMF), expressing dissatisfaction over the various initiatives taken by the National Board of Revenue (NBR) to raise revenue collection, wants to know its specific strategies and action plans.

An IMF delegation headed by Rahul Anand, the visiting Bangladesh mission head of the organisation, held a meeting with senior officials of NBR on Sunday (7 May).

Earlier, the team met with the NBR officials for two more rounds and asked to know about the activities, steps, and initiatives of the top revenue organisation.

"The delegation wants to know specific information about our revenue collection strategy," a senior NBR official present at the meeting on Sunday told The Business Standard, wishing anonymity.

"There will be some initiatives in our budget. However, since the budget is a confidential matter, I cannot tell the delegation in detail about it," said the official.

In a press release issued Sunday (7 May), the IMF flagged risks to the Bangladesh economy such as inflation, growth and foreign reserves as it concluded its mission under the $4.7 billion loan programme.

The IMF will disburse the loans in seven instalments until 2026, with the first tranche of $476.2 million released on 30 January. The next instalment is due in November.

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Mahfuz Ullah Babu

06 May, 2023, 11:25 pm

Last modified: 07 May, 2023, 09:58 am

Tech entrepreneurs want free cash-out, tax waiver on laptops, startups


Technology entrepreneurs have urged the government to take appropriate measures in the national budget for the forthcoming fiscal year 2023-24 to support the country's goal of becoming a smart nation.

In a pre-budget webinar organised by The Business Standard  on Thursday that focused on the technology sector, these entrepreneurs suggested providing a free cash-out facility, especially for merchants, to encourage the widespread use of electronic payments. 

They emphasised the need for fiscal policy support to make technology products and services accessible to the general population, especially in a high-inflation environment where additional taxes may burden consumers.

AKM Fahim Mashroor, a prominent tech entrepreneur and former president of the Bangladesh Association of Software and Information Services (BASIS), pointed out India's successful budgetary measures, where mobile financial services (MFS) cash-out transactions are free for merchants. 

This move has facilitated the transition to a cashless society, he noted, adding, "In contrast, in Bangladesh, merchants hesitate to accept MFS payments due to the approximately 1.5% fee they incur when cashing out the received amount."

Subrata Sarkar, president of Bangladesh Computer Samity (BCS), stressed the importance of conducting thorough impact assessments before imposing higher taxes and duties on essential products such as ICT hardware. 

He explained that this is necessary to prevent adverse consequences and ensure the sustained growth of the technology sector. 

Subrata mentioned that when laptops and desktops along with all other ITC hardware were getting pricier since the pandemic, the soaring dollar further fuelled the prices of the imported devices last year. 

In that very year, the government imposed a 15% value-added tax (VAT) on imported laptops and printers in the name of encouraging local production, he said, adding that now the hardware is 30%-40% pricier and is going beyond the reach of the average families when the government is planning to teach coding in primary schools.

He said the VAT had been waived since 1998 to protect local assemblers of laptops and printers, who were not yet capable of serving the local market in terms of quality and quantity, maintained the BCS president.

Fahim Mashroor said, on the other hand, that some local sectors like software, despite having self-sufficiency, are having no protection against imports, and taxing imported software would help dollar conservation and incentivize local firms.

The founder of local tech ventures like the leading job portal BD Jobs, e-commerce platform AjkerDeal, and smart logistics firm Delivery Tiger was worried about the tech adoption slowdown as smartphone purchases already halved in the country.

He urged fiscal incentives so that the hardware, connectivity, and relevant services crucial for a Smart Bangladesh do not get pricier.

Echoing Mashroor's sentiments, Mohammad Sahab Uddin, vice president of the E-commerce Association of Bangladesh, emphasised the need for tax waivers on e-commerce and startups until 2030. 

He pointed out that India's supportive measures for their digital economy have helped them grow 80,000 recognised startups and a hundred unicorns, while Bangladesh has only produced one unicorn. Uddin suggests that the government should let the digital economy grow before taxing it.

Startup entrepreneur Waseem Alim, co-founder and CEO of the online grocery platform Chaldal, agreed with Uddin and Mashroor, suggesting that e-commerce platforms should not be burdened with the responsibility of deducting VAT from suppliers. He believes that this puts them in uneven competition with offline peers who are not under practical VAT coverage.

E-commerce and startups should be tax-VAT waived till 2030, suggested both Sahab Uddin and Alim.
Masahroor proposed tax incentives for firms that hire fresh graduates, which is an important issue given the rising concern of graduate unemployment in the country. 

Subrata Sarkar called for duty reduction on the imported hardware for robotics and the internet of things as they even go as high as 80% in the country, unlike in the peer economies, and said the high duties would keep hurting the Smart Bangladesh mission.

He also rang his alarm bell against the halted IT projects of the government, meant to conserve dollars.

Even the payments against IT procurements are halted nowadays, being it for the state's significant agencies or other offices, said Subrata Sarkar.

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জসীম উদ্দীন

11 May, 2023, 11:15 pm

Last modified: 11 May, 2023, 11:26 pm

একাধিক গাড়ি থাকলে দ্বিতীয় গাড়ির জন্য কার্বন কর আসছে

কার্বন করের পরিমাণ নির্ধারণ করা হবে সর্বোচ্চ ইঞ্জিন সক্ষমতার গাড়ির ভিত্তিতে। অর্থাৎ একাধিক গাড়ি থাকলে যে গাড়ির সিসি ক্ষমতা বেশি হবে সেটির ওপর কার্বন কর ধার্য করা হবে।


কার্বন নিঃসরণ হ্রাস, শহরের যানজট সমস্যার নিরসন এবং গণপরিবহনের ব্যবহার বাড়ানোর লক্ষ্যে আগামী অর্থবছর থেকে প্রথমবারের মতো কার্বন কর চালু করতে পারে সরকার।

অর্থ মন্ত্রণালয়ের কর্মকর্তাদের তথ্যানুসারে, একাধিক গাড়ি আছে এমন করদাতাদের দ্বিতীয় গাড়ির রেজিস্ট্রেশন ও নবায়নের সময় ২৫ হাজার টাকা থেকে ২ লাখ টাকা পর্যন্ত বাড়তি কর দিতে হবে।

কার্বন করের পরিমাণ নির্ধারণ করা হবে সর্বোচ্চ ইঞ্জিন সক্ষমতার গাড়ির ভিত্তিতে। অর্থাৎ একাধিক গাড়ি থাকলে যে গাড়ির সিসি ক্ষমতা বেশি হবে সেটির ওপর কার্বন কর ধার্য করা হবে।

অর্থমন্ত্রী আ হ ম মুস্তফা কামালের সভাপতিত্বে অনুষ্ঠিত সাম্প্রতিক এক সভায় এই প্রস্তাবগুলো নিয়ে আলোচনা হয়। ১৪ মে প্রস্তাবগুলো অনুমোদনের জন্য প্রধানমন্ত্রী শেখ হাসিনার সামনে উপস্থাপন করা হবে।

কর্মকর্তারা বলেন, ২০২৩-৩৪ অর্থবছরের বাজেটে কার্বন করের প্রস্তাব উত্থাপন করার পরিকল্পনা করছে সরকার।

বিশেষজ্ঞ ও অর্থনীতিবিদরা মনে করছেন, উদ্যোগটি ভালো। তবে এই করের মাধ্যমে রাজস্ব আয় করার চাইতে পরিবেশের সমস্যাকে অগ্রাধিকার দেওয়া উচিত। তা না হলে এটি আরেক ধরনের সম্পদ করই হবে।

দ্য বিজনেস স্ট্যান্ডার্ডের সঙ্গে আলাপকালে বাংলাদেশ পরিবেশ আইনজীবী সমিতির (বেলা) গবেষণা আইনজীবী বারিশ হাসান চৌধুরী বলেন, 'কার্বন কর চমৎকার উদ্যোগ। তবে আমাদের মনে রাখতে হবে, এটি পরিবেশ নীতি এবং কর নীতি দুটো হিসেবেই কাজ করে।'

ফ্রেন্ডস অভ দি আর্থ এশিয়া প্যাসিফিক-এর রিজিয়োনাল ফ্যাসিলিটেটর বারিশ বলেন, আমাদের সতর্কত থাকতে হবে, যাতে উপযুক্ত মানুষদের করজালের আওতায় আনা যায়। এ করের প্রকৃত উদ্দেশ্য যদি কার্বন নিঃসরণ ও যানবাহনের ব্যবহার কমানো হয়, তাহলে এটি সেভাবেই আরোপ করতে হবে।

পলিসি রিসার্চ ইনস্টিটিউটের গবেষণা পরিচালক মোহাম্মদ এ রাজ্জাক বলেন, পূর্ব ঘোষণা ছাড়া বা অল্প সময়ের নোটিশে কার্বন কর আরোপ করা যুক্তিসংগত হবে না। 'সরকার যদি কার্বন কর আরোপ করতে চায়, তাহবে তার আগে একটা নীতিমালা তৈরি এবং জনগণকে সতর্ক করতে হবে,' বলেন তিনি।

কিন্তু কার্বন নিঃসরণ কমানোর চাইতে রাজস্ব আদায়ের দিকে সরকারের ঝোঁক বেশি মনে হচ্ছে বলে মন্তব্য করেন রাজ্জাক। এ সময় তিনি যুক্তরাজ্যের উদাহরণ দিয়ে বলেন, দেশটি তার জনগণকে সতর্ক করেছে দিয়ে বলেছে যে ২০৩০ সালের পর থেকে ডিজেলচালিত গাড়ির ওপর তারা কর আরোপ করবে।

চলতি অর্থবছরে সরকার মোটর গাড়ির সম্পূরক শুল্ক বৃদ্ধি করেছে। ২০০১ সিসি থেকে ৩০০০ সিসির গাড়ি আমদানিতে সম্পূরক শুল্ক ২০০ শতাংশ থেকে বাড়িয়ে ২৫০ শতাংশ করা হয়েছে এবং ৩০০১ সিসি থেকে ৪০০০ সিসির গাড়ির সম্পূরক শুল্ক ৩৫০ শতাংশ থেকে বাড়িয়ে ৫০০ শতাংশ নির্ধারণ করা হয়েছে।

২০২০-২১ অর্থবছরে সরকার কার বা মাইক্রোবাসের ওপর কর ৫০ শতাংশ থেকে বাড়িয়ে ৬৭ শতাংশ করে। এর ফলে ১৫০০সসি পর্যন্ত ইঞ্জিন ক্ষমতার গাড়ির মালিককে বার্ষিক ২৫ হাজার টাকা কর দিতে হয়, যা আগে ছিল ১৫ হাজার টাকা।

৩৫০০ সিসির বেশি ইঞ্জিন ক্ষমতার গাড়ির রেজিস্ট্রেশন বা নবায়নের সময় ২ লাখ টাকা দিতে হবে, যা আগে ছিল ১ লাখ ৫০ হাজার টাকা।

এছাড়া আয়কর আইন অনুসারে, মালিকের কাছে দুই বা ততোধিক মোটরগাড়ি থাকলে প্রত্যেক বাড়তি মোটরগাড়ির জন্য করের হার ৫০ শতাংশ বাড়বে।

বর্তমানে অনেক দেশই মোটর যানবাহন ক্রয় বা ব্যবহারের ওপর তাদের করের ক্ষেত্রে কার্বন-ডাই-অক্সাইড সংক্রান্ত নানা ধরনের কর আরোপ করছে।

অনেক দেশে করের পরিমাণ নির্ভর করে যানবাহনের জ্বালানি সাশ্রয়ের ওপর—যা কার্বন-ডাই-অক্সাইড নিঃসরণের সঙ্গে নিবিড়ভাবে সম্পৃক্ত।

'ইনসেনটিভস ফর কার্বন-ডাই-অক্সাইড এমিশন রিডাকশনস ইন কারেন্ট মোটর ভেহিকল ট্যাক্সেস' শীর্ষক এক প্রতিবেদনে উঠে এসেছে, মোটরগাড়ি থেকে কার্বন-ডাই-অক্সাইড নিঃসরণ হ্রাসের জন্য যে প্রণোদনা দেওয়া হয় তা অর্থনীতির অন্যান্য খাতে দেওয়া নিঃসরণ হ্রাস প্রণোদনার চেয়ে অনেক বেশি।

লন্ডন স্কুল অভ ইকোনমিকস-এর গবেষকদের পরিচালিত এক সমীক্ষায় দেখা গেছে, ১৯৯০-এর দশকের শুরুতে সুইডেনে পরিবহন জ্বালানির ওপর কার্বন কর এবং মূল্য সংযোজন কর প্রবর্তনের পর সুইডিশ পরিবহন খাত থেকে কার্বন-ডাই-অক্সাইড নির্গমন গড়ে প্রায় ১১ বেসিস পয়েন্ট কমেছে। ৬ বেসিস পয়েন্ট হ্রাসের পেছনে কার্বন করের প্রভাব রয়েছে।

বিআরটিএ-র তথ্য অনুযায়ী, দেশে বর্তমানে বিআরটিএর নিবন্ধন পাওয়া মোট গাড়ির সংখ্যা ৫২ লাখ ৯২ হাজার ৪৪০টি; এর মধ্যে কার-এর সংখ্যা ৩ লাখ ৯১ হাজার ৪৯১টি।

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Jasim Uddin & Reyad Hossain

21 May, 2023, 10:25 pm

Last modified: 22 May, 2023, 12:19 pm

End of zero tax!

Govt considers a minimum Tk2,000 tax on individuals even with no taxable income


The government is considering a minimum Tk2,000 tax on individuals who will file tax returns even if they do not have taxable income. But, analysts argue that such a move would burden low-income people and contradict the concept of tax-free income thresholds.

According to finance ministry officials involved in the process, the budget proposals for the fiscal year 2023-24 are expected to incorporate the new rule regarding the minimum tax and the provision for deregistering from TIN in the event of death or no income.

Officials said there is a possibility that the minimum tax could be gradually imposed on all TIN holders.

Currently, there are around 86 lakh individual TIN holders, but only 32 lakh of them submit tax returns, indicating that they declare their income, expenses, and pay taxes accordingly.

Among the individuals who submit tax returns, approximately eight lakh do not have taxable income. If these eight lakh individuals are made to pay the minimum tax of Tk2,000, the government will generate an additional revenue of Tk160 crore.

If the minimum tax rule is applied to all TIN holders, it would be imposed on 62 lakh individuals (86 lakh minus 24 lakh), resulting in an additional revenue generation of Tk1,240 crore.

Officials said the National Board of Revenue (NBR) intends to make tax return submission mandatory for individuals seeking both public and private services in an effort to encourage tax compliance.


Last year, the NBR made tax return submission mandatory for 38 different services, including obtaining loans exceeding Tk5 lakh, trade licences in city corporations, and export-import permissions.

The proposals were recently discussed at a meeting chaired by Finance Minister AHM Mustafa Kamal and subsequently presented to Prime Minister Sheikh Hasina for approval last week. Currently, the proposals are undergoing a thorough legal review by the law ministry before being incorporated into the upcoming budget. The budget is scheduled to be presented in the parliament on 1 June.

Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, opposed the government's move to impose minimum tax as low-income people will be in trouble.

"If there is no taxable income, there will be no tax and there is nothing wrong in it," said Mansur, also a former senior official of the IMF.

Muhammad Abdul Mazid, a former chairman of the NBR, said the decision, if implemented, would increase administrative complexity.

According to NBR officials, the government is going to take this decision aiming at more tax collection to improve the tax-GDP ratio, which stands at below 8%, as per the suggestion of the IMF.

According to a senior official of the finance ministry who spoke on condition of anonymity to TBS that this minimum tax may not affect individuals as a cup of tea currently costs Tk6-7.

People may sacrifice a cup of tea daily for the sake of the country, he added.

He further said the minimum tax Tk2,000 will not be a big amount for taxpayers to prove their return submission, considering the services given by the tax officials.

Tax-free income limit may expand

The government may also increase the tax-free income threshold to Tk 3,50,000 from Tk300,000 considering the current inflation situation.

If the income exceeds the prescribed limit of individual taxpayers, they will have to pay income tax at the prescribed rates.

Over the last ten fiscal years, the tax-free income limit has gradually increased from Tk220,000 in FY14-15 to Tk2,50,000 in FY16 and Tk3,00,000 in FY21.

The NBR did not increase the tax-free income limit in the last two years despite demands from various businessmen, economists, and social organisations.

At present, the annual income of a male individual taxpayer is Tk3 lakh, Tk3.5 lakh for female or taxpayers above 65 years of age, Tk4.5 lakh for disabled taxpayers, and Tk4.75 lakh for war-wounded freedom fighters.

Currently, if the income is below this limit, a taxpayer could submit a return showing zero income only and, in this case, no tax would have to be paid. Even if the income is Tk1 more than the tax-free ceiling, a taxpayer has to pay a minimum income tax depending on the areas they live in.

The minimum tax rate for taxpayers registered in Dhaka North and South and Chattogram City Corporation areas is Tk5,000. The minimum tax rate for taxpayers located in other city corporation areas is Tk4,000. And the minimum tax rate for taxpayers located outside city corporation areas is Tk3,000.

If one submits a return showing zero income in the next budget, one will have to pay a minimum tax of Tk2,000 to get proof of tax return submission.

Snehasish Barua, a tax consultant, said if a person has to pay tax despite not having taxable income, it goes against the spirit of "no income, no tax".

Major services require proof of tax return submission

Currently, 38 services require proof of tax return submission, which include taking a loan of more than Tk5 lakh from a bank or financial institution, being a company director or shareholder, obtaining an Import-Export Registration Certificate, obtaining a trade licence from a city corporation or municipality, registering cooperative societies, being a surveyor for insurance companies, deeding land or flat worth more than Tk10 lakh, applying for credit cards, becoming a member of professional bodies, obtaining licences such as drug licence, fire licence, environmental clearance, BSTI licence, and clearance, applying for gas-electricity connection, enrolling children in English medium schools, taking distributorship of a company, applying for an arms licence, opening a LC in a bank, purchasing savings papers above Tk5 lakh, participating in elections, government employees with a salary of Tk16,000 or more,  MPO teachers receiving a salary of more than Tk16,000, submission of the bill of entry for import-export goods.

Why minimum tax?

The reasons for implementing minimum tax provisions vary, but they generally aim to achieve fairness in the tax system and prevent high-income individuals or corporations from exploiting loopholes to avoid paying a significant amount of taxes.

By setting a minimum tax, these provisions ensure that even after taking advantage of deductions, exemptions, and credits, taxpayers still contribute a minimum share of their income or assets towards taxation.

The other countries with minimum tax provision

Here are a few examples of minimum tax provisions in different countries:

The USA has a minimum tax provision known as the Alternative Minimum Tax (AMT). It was designed to ensure that high-income individuals, corporations, and estates pay a minimum amount of tax, regardless of deductions or credits. The AMT primarily targeted taxpayers who have a high level of income but use various deductions and credits to significantly reduce their regular tax liability.

In Canada, there is a minimum tax provision called the "Minimum Tax on Large Corporations." It applies to Canadian-controlled private corporations (CCPCs) that have taxable capital employed in Canada above a certain threshold. The minimum tax ensures that large corporations with significant taxable capital pay a minimum amount of tax. It is also present in Bangladesh as a company has to pay 0.6% tax on its turnover even after making losses.

Germany has a minimum tax provision known as the "Minimum Tax on Capital." It applies to corporations and partnerships with limited liability that have a certain level of equity capital. The purpose of this tax is to prevent profit shifting and tax avoidance strategies by imposing a minimum tax based on the equity capital of the company.

France introduced a minimum tax provision called the "Minimum Tax on High Income" until 2017. It applied to individuals with a high net worth and aimed to ensure that wealthy individuals paid a minimum amount of tax regardless of deductions or exemptions. However, the ISF was replaced by the "Wealth Tax on Real Estate" in 2018, which focuses specifically on taxing real estate assets.

Argentina implemented a minimum tax provision called the "Minimum Presumed Income" that applies to individuals who have a certain level of assets. It establishes a minimum taxable income based on the value of their assets, regardless of their actual income. Individuals are required to pay taxes based on this presumed minimum income, ensuring they contribute a minimum amount of tax.

In India, the income tax system is primarily based on progressive tax rates like in Bangladesh, where individuals are taxed based on their income slabs, and various deductions and exemptions are available to reduce their taxable income. There is no minimum tax system in India.

Provision to be made to deregister TIN

The government is set to introduce a new provision for the deregistration of TIN for the first time.

Currently, there is no way to release a deceased taxpayer from the obligation of tax return submission, as stated by officials from the NBR. However, a senior NBR official, seeking anonymity, revealed that under the new provision, taxpayers will have the opportunity to apply for the de-registration of their TINs by providing valid reasons to the tax authority.

The official further emphasised that there is a significant disparity between the number of TIN holders and actual tax return submissions. The implementation of this provision will assist in determining the accurate count of taxpayers and active TIN holders. The provision will be included in the upcoming income tax law (Bangla version), which will be presented before parliament on 1 June 2023, along with the new budget.

Former NBR chairman Muhammad Abdul Mazid highlighted the existing gray areas concerning the payment of taxes.

He stated that the new provision will offer a way out by requiring beneficiaries or successors to provide valid proof of the deceased taxpayer's death. Upon verification, the tax authority will proceed with the de-registration of TINs, relieving the individual from the tax obligations.

To illustrate, consider the case of a housewife who possesses a savings certificate worth Tk5 lakh but does not have any taxable income. Two years ago, she acquired a savings certificate using a TIN certificate. However, starting this fiscal year, submission of the tax return has become mandatory instead of a TIN certificate.

Alternatively, there is a provision for a 15% tax deduction at source on the interest income of the savings certificate. If the housewife submits a copy of her tax return, the tax rate will be reduced to 10% at source. To avoid an additional 5% tax deduction at source and provide evidence of tax return submission, the housewife will be required to pay Tk2,000 as the minimum tax from the next fiscal year.

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Much-debated Tk 2000 min. tax being ditched finally

To be adjusted against tax at source during return filing

 DOULOT AKTER MALA |  June 16, 2023 00:00:00


The much-debated Tk 2000 minimum tax for all to be eligible for a raft of government services is eventually up to be ditched in final cobbling of new fiscal measures, sources said.

Instead, the amount would be adjusted against tax at source during return filing as citizens already pay taxes at source.

Official sources said the proposed provision would not be brought in the new income-tax law following widespread controversy provoked by the budget proposal.

The government has decided not to impose Tk 2000 as minimum tax on people not having taxable income by "honouring opinion of cross-sections of people", they added.

The finance minister proposed the new measure while placing the national budget for fiscal year 2023-24 in parliament on June 1, 2023.

The provision has been incorporated into the Income Tax Bill 2023, placed in the parliament on June 8.

The Parliamentary Standing Committee on the Ministry of Finance submitted amendments to the draft Income Tax Bill 2023 on Thursday to the parliament with recommendation for the National Board of Revenue (NBR) to scrap the provision.

While unveiling an over Tk 7.61-trillion proposed national budget for the upcoming fiscal, Finance Minister AHM Mustafa Kamal said, "I propose to make the minimum tax two thousand taka among competent people who are below taxable income but have the obligation to submit income-tax returns to take service from the government with a view to circulating this participation in government welfare work."

With the imposition of tax, people having income below the tax-free threshold would have to pay the tax mandatorily.

Currently, some 3.2 million taxpayers submit tax returns out of 8.7 million taxpayer-identification number (TIN)-holders.

However, most of the taxpayers submitting tax return to obtain different services showing proof of submission of return are paying tax at source.

Tax experts have said the amount of tax at source would be adjusted with the payable taxes of the taxpayers.

As per conditions, tax at source paid by taxpayers against the services usually goes beyond the Tk 2000 limit.

Chairman of the Taxation committee and former president of the Institute of Chartered Accountants Bangladesh (ICAB) Md Humayun Kabir says Tk 2000 as minimum tax is not a new measure or not necessarily has to be paid additionally.

People who are obtaining 38 services, for which submission of tax return is mandatory, are already paying source tax or Tax Deducted At Source (TDS), he mentions.

"That means all of the mentioned services, under 184A, are subject to TDS and if the TDS is equal or higher than Tk 2000, they will not need to pay further tax," he says in clearing the mist the measure cloaked in.

For Tk 0.5 million worth of government savings certificate, where TDS is 5.0 per cent and tax on interest rate is at least 10 per cent, his/ her TDS would be at least Tk 2500, he added about the arithmetic of taxing.

"None of the services mentioned in 184A is under TDS for less than Tk 2000. Introducing this will bring transparency and accountability both to tax payers and tax authorities, increase return submission and thereby expand tax net."

"Is it not justifiable to levy Tk 2000 when tax department has to spend time and incur expenditures to scrutinize an assesee having bank deposit over Tk 1.0 million, got a registered car or submitting a plan (meaning she has land to build a house) etc?" He questioned.

Currently, people having annual income up to Tk 0.3 million are exempt from payment of income tax. In the proposed budget, the government has increased the threshold to Tk 350,000.

A report of the Parliamentary Standing Committee on the Ministry of Finance has placed a set of recommendations, including exempting the bank depositors having up to Tk 1.0 million deposits (credit balance) from mandatory submission of tax returns.

Instead the committee has proposed making return submission mandatory for the bank depositors having term or fixed deposits in the bank of the said amount.

Official sources have said many of the banks are asking depositors to submit proof of submission of tax returns irrespective of their deposited amount despite having a ceiling for this.

"The amendments have been proposed to facilitate country's financial inclusion and encourage people on formal and recorded transaction," the vetting report says.

The committee placed its report to parliament on Thursday proposing the amendments to the Finance Bill 2023.

According to the proposed budget, salaried persons having two-thirds of the total income or Tk 450,000, whichever is less, would be considered taxable.

The committee, headed by Abul Hassan Mahmood Ali, also proposed considering one-third of the income of the salaried person or Tk 450,000, whichever is less, as taxable income.

The changes have been recommended after the parliamentary committee found people having Tk 66,000 monthly income may be excluded from the tax net.

According to the recommendation, companies, firms, association of persons and funds having up to Tk 30 million in turnover have to submit audited financial statements, which was Tk 20 million in the proposed budget.

Confusions on tax rebate for savings certificates and debenture have been cleared in the report by interpolating two words in the government securities.

Also, the committee has proposed scrapping the provisions of proposed Finance Bill on mandatory submission of wealth statement at the time of overseas travel.

It also proposed raising special tax amount for showing undisclosed income in apartment.

The parliamentary standing committee on finance also recommend scrapping a provision under 167 of the bill for submission of tax return by a person after his foreign trip for personal purposes.

Furthermore, the committee recommended raising the special tax rate against investment in 200-square-meter flats or buildings in Gulshan Banani, Baridhara, Motijheel and Dilkusha commercial area to Tk 6000 per square meter from the previous Tk 5000.

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Reyad Hossain

26 August, 2023, 10:25 pm

Last modified: 26 August, 2023, 10:39 pm

NBR seeks direct access to taxpayers' bank details

The revenue board thinks it will help check tax evasion



The National Board of Revenue (NBR) wants direct access to taxpayers' bank account details through the Bangladesh Bank as part of an integration endeavour aimed at combating tax evasion. This would give the revenue board easy access to banking details of taxpayers and traders helping them monitor money flow.

The VAT Online Project Office is collaborating with the Bangladesh Bank for this initiative, with the latter making necessary preparations, as confirmed by insiders within the NBR.

Sources on the know have indicated when completed, it would not be necessary to request the information from banks, as the revenue board would be able to directly access the data with permission from the central bank.

In this case, the central bank will give special approval to VAT commissioners and there will be a strict login system. This access will be available through a secured password, OTP.

Kazi Mostafizur Rahman, director of the VAT Online Project, told The Business Standard, "There are some preparatory works before starting this activity, and Bangladesh Bank is developing [that]. Hopefully, we can start it by December."

The NBR is in the process of implementing the Medium and Long-term Revenue Strategy, which also includes the issue of revenue administration's access to bank-held taxpayer information.

The committee established to formulate the revenue strategy presented its draft on 24 August in an event where the NBR chairman was present.

A committee member on condition of anonymity told TBS, "...proposals have been made for us to have access to bank accounts."

Nevertheless, Md Mezbaul Haque, the spokesperson for the Bangladesh Bank, informed TBS that as of now, no such determination has been finalised. He questioned the notion of suddenly providing NBR with access to individuals' accounts, emphasising the need to carefully consider such privileges.

Meanwhile, business people have argued that providing the NBR with direct access to bank information could create fear, including businessmen, possibly leading to reduced banking transactions. Some of them stressed the importance of transparency in this regard.

Dr Muhammad Abdul Mazid, former NBR chairman, also differs from the NBR. He contends that bank accounts are confidential. If the NBR or tax officials were granted access to all accounts, it would infringe upon the principle of confidentiality, he observed.

Economist Dr Ahsan H Mansur echoes this perspective.

Tanjib-ul Alam, a renowned lawyer specialising in company laws, emphasised to TBS that the concept of banking secrecy in relation to the revenue authority has lost its relevance in the country. 

"At present, the NBR is endowed with such powers to gather taxes as per the Customs and VAT Act. The revenue board holds the utmost authority according to existing legislation. So, the confidentiality once associated with banks is no longer there," he concluded.

Syed Mahbubur Rahman, managing director of Mutual Trust Bank Limited, welcomes the initiative but insists on its execution with transparency.

A VAT Commissionerate commissioner, underscored the necessity for the NBR to directly access bank account information, saying that last year, his office requested bank account details of around 100 individuals, yet the concerned banks only furnished information for approximately 30 people. The banks claimed to lack information about the remaining accounts.

The commissioner explained, "Presently, an individual might hold or transact through four accounts in four different banks, but information might only have been provided to the VAT department for a couple of them. Consequently, accurate transactional details are elusive.

"Similarly, a company might secure a significant loan from a bank. However, the current system doesn't enable us to determine if that money has been invested."

Pointing out that accurate VAT collection information is not available at the business level, the VAT commissioner said, "Hundreds of crores of taka are being transacted in various markets in Old Dhaka and 5% VAT is supposed to be levied as Trade VAT on these transactions. But, accurate information about this is unavailable."

Responding to a query as to how the integration with banks will work, the official said that it is neither possible nor necessary to know the information of crores of bank accounts. "Accounts will be identified based on risk management so that information can be collected at any time when needed," he added.

According to data from the Bangladesh Bank, the number of bank accounts in the country was 13.62 crore by last December, with total deposits approximating Tk16 lakh crore. Among these, about 1.10 lakh accounts witnessed transactions exceeding Tk1 crore.

As per NBR's VAT Online Project Office, there are 4.57 lakh Business Identification Number (BIN) holders of whom over three lakh filed tax returns in the previous month. In other words, one-third of BIN holders do not file returns.

Tax collection ratio is not growing with the country's GDP 

The NBR's data reveal a stagnation in the tax-to-GDP ratio over recent years. In fact, the ratio declined to 8.7% in fiscal 2021-22, the lowest in South Asia.

Nonetheless, the government aims to elevate this ratio to 12.3% by 2025 as per the 8th Five-Year Plan. 

The NBR is actively devising the Medium and Long-term Revenue Strategy to fulfil these goals.

Although its finalisation, initially set for March of this year, was delayed, insiders predict completion by December. The draft revenue strategy is expected to be finalised within this year based on feedback from stakeholders and think tanks.

What is there in the draft revenue strategy?

According to the draft Medium and Long-term Revenue Strategy report, apart from the integration with banks, the integration of VAT with the ASYCUDA WORLD System of Customs, and other systems has also been discussed.

On the other hand, as part of the NBR's restructuring, it has been proposed to merge the NBR and Internal Resource Division (IRD) as "Revenue Division" and a full-time state minister for the Revenue Division. The establishment of a research and policy analysis centre in the revenue division has also been proposed.

The draft strategy also proposed to establish a specialised money laundering unit to fight money laundering.

An official of the NBR told TBS that currently, the Customs Intelligence and Investigation Department (CIID), and the Central Intelligence Cell of the NBR work to prevent money laundering. According to the proposal, skilled and experienced personnel should be posted in these specialised units and they should be allowed to work there for a long time.

Besides, as part of VAT simplification, integration and modernisation, comprehensive automation, increased voluntary compliance, collection of VAT on digital economy, transfer pricing and risk-based auditing, and big data analytics have been mentioned.

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