Home Today's Paper Most Popular Video Gallery Photo Gallery
Subscription Blog Signin Register
Logo
Sunday, July 22, 2018 05:02:02 AM
Follow Us On: Facebook Twitter Twitter Twitter Twitter

Taxpayers seeking fair deals and Tax friendly environment

By
16th-May-2018       
Comments
Share your thought
Post a comment »
Read all () »

A F Nesaruddin, FCA :
Collection of tax revenue is undoubtedly essential for the running of any government and economic development. So, it is natural for government to try constantly to increase their tax revenue. During the last few years Bangladesh's tax revenue has gone up significantly. During the last 05 years average growth in annual collection of tax revenue (NBR revenue) has been 14.28%. In financial year 2012-2013, total collection had been Taka 109,152 crore while in financial year 2016-2017, the figure rose to Taka 185,004 crore. Contribution of direct taxes (mainly income tax) in this collection was 37.17% in average. During this period, our GDP also grew at an average rate of 6.5%. Such a growth rate is not bad at all. And productive activity in various sectors of our economy including industry, trade and commerce have also shown steady growth. This steady growth of Bangladesh have also been recognized internationally by way of recommending Bangladesh's entry into the middle-income group of countries.
In this scenario of increase tax revenue and overall economic growth of Bangladesh tax payers play a very significant role. Because they are the ones who pay the increased amounts of tax and contribute directly to the growth of revenue. Improvement in tax administration and expansion of tax base also has a role in this matter. Currently, the number of electronic TIN (e-TIN) holders is more than 32 lakhs and the number of tax returns submitted this year is more than 15.5 lakhs. This is a significant improvement compared to last year's figures of 27.5 lakhs and 12 lakhs respectively. Ultimately, tax payers undoubtedly play the central role in our revenue growth. So, they naturally expect fair and decent treatment from the concerned government agencies, namely the National Board of Revenue and the Taxes Department. They expect that provision of law would be applicable objectively without any bias and discretion would be applied judiciously; so that they are not subjected to unnecessary harassment. But, unfortunately, it is sometimes found that tax officials behave irrationally and apply their discretionary powers on the basis subjective consideration rather than on objective handling of available information. This causes immense suffering and harassment to tax payers, which is undesirable in the greater interest of our national economy. In the following paragraphs, efforts have been made to try to give some examples of such arbitrary actions of tax officials which cause harassment and sufferings to the tax payers.
a. Arbitrary attachment of Bank account
In section 143(2) of the Income Tax Ordinance 1984, there is the provision for attachment of an assessee's bank account as a measure for collection of 'Undisputed' arrear tax. This is obviously a harsh measure and is intended to be a 'last resort' for collection. But now-a-days this measure is quite commonly used by tax officials. While resorting to bank attachment the DCT is required to check a few things in order to be sure that the step taken is not unjust or unlawful. But they often failed to do this. Noted below are some of the points the tax officials often overlook:
1. Issuance of Demand Notice under section 135 are not ensured.
2. Whether the demanded amount are correct or not, that is not ensured (According to the language of notice under section 143 can be issued only to the defaulters, but in practice it is not followed.)
3. Appeal of the Assessee for deferment of tax realization are not considered from judicial point of view.
4. Instead of issuing the copy of bank attachment notice to the Assessee, sending of Tax Inspector to the bank to create pressure on the Bank Manager for realization of the demanded tax is contrary to the basic principle of Aritcle-42 (Rights to Property) of the Constitution.
5. Attempts are made to encash the Fixed deposit of the Assessee maintained with the bank through notice under section 143 but the instrument itself (FDR) is held by the Assessee.
6. There is a tendency to issue attachment notice well before the expiry of the time limit for submission of Appeal in the case of a disputed demand.
7. Good intention of the Assessee to pay the tax is not generally taken into consideration.
Such unjust and unlawful activity of tax officials obviously causes great inconvenience and harassment to tax payers. There should be strict administrative monitoring to ensure that the extreme measure of bank attachment is not applied whimsically or unlawfully, rather it is applied with proper caution and judiciousness.    
b. Arbitrary disallowance of expenses
It is a common practice among the assessing officers that, while making a tax assessment, they arbitrarily make disallowances from genuine business expenses on unsound grounds. They also, at times, reject shown sales or receipts and make whimsical, excessive estimate of sales or receipts. Consequently, tax burden of the tax payers is largely enhanced. There would be little reason for grievance if these action were taken by the assessing officers on genuine and lawful grounds. But, unfortunately, in most cases these disallowances do not have any legal grounds or justifiable basis. They are done totally on the basis of subjective assumption or guess work. Such unjust and arbitrary action of the DCT simply creates great hardship and unnecessary harassment for tax payers and give rise to a series of litigations. Ultimately, these arbitrary action do not make any positive contribution towards tax collection. They only increase and intensify the feeling of mistrust and misunderstanding between tax payers and the taxes department. It is true that some tax payers with the intension of evading tax, do submit accounts which are not correct and which do not make an honest presentation of the affairs of the business. Those accounts may be disregarded. But to treat all tax payers in the same manner using the same standard is very unfair for those honest tax payers who submit genuine and reliable audited accounts which are easily verifiable and correctly reflect affairs of the business. In this regards tax official should try to make some distinction between genuine or good tax payers and tax evaders in treatment depending on a realistic point of view.
The NBR should effectively intervene and provide for close monitoring to stop such undesirable and unjust practices. This is absolutely essential for maintaining a friendly relation between tax payers and tax officials.     
c. Unfair selection of cases for tax audit
Sub-section 3 of the section 82BB provides that a return filed under Universal Self-assessment may be selected for audit by the NBR, or any subordinate authority, if so authorized by the NBR, according to guidelines given by the NBR. In practice, audit cases are actually selected by the circle (DCT) and approved by the higher authorities. In this selection process tax officers often act arbitrarily and are guided by subjective considerations. This often causes unnecessary harassment to the tax payers. Such practice is also against the basic principle of auditing tax cases. And ultimately this does not help in tax collection.
The NBR should give realistic and useful guidelines for selection of audit cases and enforce close monitoring to ensure that tax officials do not misuse the power of auditing. Such measures will minimize harassment of tax payers and establish a better relation between the tax payers and taxes department. This will ultimately contribute to better tax administration and improvement in tax collection.
d. Misuse of Section 120 by the IJCTs or IACTs
Section 120 of the Income Tax Ordinance 1984 empowers the IJCT/IACT to revise an 'Order' passed by the DCT. Recently, the IJCT/IACT's have been passing orders under section 120 in respect of cases completed under universal self-assessment (Section-82BB). Under Section 82BB the DCT does not pass any assessment order, the acknowledgement receipt of return is only 'deemed' to be an assessment order. Therefore there is no scope to apply section 120 in this case. But ignoring this legal and factual position, the IJCT/IACT's are applying section 120 in these cases and making absolutely fresh and arbitrary assessment instead of revising any order. This is causing great harassment to assessees and giving rise to unnecessary litigations. There must be some administrative intervention from the NBR to stop this unjust and unlawful application of section 120 by the IJCT/IACT.
The present government of Bangladesh has repeatedly made its policy-declaration that tax offices will be tax-payer friendly. But the unjust activity of the tax officials as discussed above will certainly not make any positive contribution towards achieving this declared policy-goal of the government. In fact, such unreasonable behavior of tax officials will only create a strong negative feeling among the tax payers and widen the gap in trust and good-will between tax payers and tax officials. Moreover, in the ultimate analysis, such arbitrary and unjust measures do not help in tax collection. Rather, they give rise to prolonged litigations and act as hindrances to smooth tax collection. Therefore, for the sake of collection of tax revenue as well as for the greater national interest of administrative fairness, the NBR should take effective steps to ensure that tax officials refrain from behaving unjustly with tax payers and always try to be fair and lawful in their attitude towards tax payers, so that, honest and innocent tax payers are not subjected to undue harassment and suffering.
(A F Nesaruddin, FCA is practicing chartered accountant and the Senior Partner in Hoda Vasi Chowdhury & Co, Chartered Accountants)

Tariff
Add Rate

News Archive

Inside The New Nation

Entertainment »

Dhadak Public Review: Ishaan Khatter, Janhvi Kapoor win hearts


The day is finally here and Ishaan Khatter - Janhvi Kapoor starrer Dhadak has hit the theatres. The film that marks the debut of late actress Sridevi's daughter opposite Shahid Kapoor's younger brother has won audiences heart. A remake of the Marathi blockbuster Sairat, Dhadak is helmed by director Shashank ...

Entertainment »

Ram Gopal Varma to make a biopic on Sanjay Dutt


Sanju has become one of the biggest hits of Bollywood. Directed by Rajkumar Hirani, Sanju gives us a glimpse of the controversial life of Sanjay Dutt and touches upon sensitive issues like his addiction to drugs, his difficulty in dealing with the passing away of his mother and the label ...

Sports »

A participant of the talent hunt programme of archerers in action at the Bir Shreshtha Nur Mohammad Stadium in Narail on Saturday. Bangladesh Archery Federation has arranged the programme, while City Group has sponsored the programme.


Sports »

Sloane Stephens of the United States, returns to opponent Madison Keys, also of the United States during an exhibition match at the International Hall of Fame's center court on Friday.


City »

Prime Minister Sheikh Hasina receiving letter of honour from Awami League (AL) General Secretary and also Road, Transport and Bridges Minister Obaidul Quader at a reception accorded to her organised by AL at Suhrawardy Udyan in the city on Saturday.


Editorial »

CHT people must be assured sense of participation: Fear of force doesn`t win people


THE lack of government's desire over holding elections to the regional council and the three District Councils in Chattogram Hill Tracts has long been depriving indigenous people of their right to have elected representatives in the local bodies. News media reported that for almost two decades, the District Councils have ...

International »

US presses China and Russia to enforce sanctions on N Korea


AP, United Nations : The United States on Friday welcomed the U.N. Security Council's united support for the fully verified denuclearization of North Korea and pressed China and Russia to strictly enforce U.N. sanctions to get Pyongyang to give up its nuclear weapons.U.S. Secretary of State Mike Pompeo accused North Korea ...

Editorial »

World must be united to ensure trial of the genocide against Rohingya people


ROHINGYA refugees reaching Bangladesh said violence, including torture, persists against them in Myanmar and the overall environment remains "menacing" for ethnic and religious minorities. UN human rights investigators carried out the Rohingya's plight after a five-day visit to the refugee camp of Kutupalong in Cox's Bazar where they interviewed new ...

Football »

Mata salvages draw as Man Utd open North American tour


AFP, Los Angeles :Juan Mata grabbed the 78th minute equalizer as Manchester United opened their pre-season with a 1-1 draw against Club America on Thursday in Phoenix, Arizona.A header from Henry Martin in the 59th minute - past substitute goalkeeper Joel Pereira - had put Mexican outfit America in the ...

Entertainment »

Rituparna arrives Dhaka tomorrow for movie Jam


Sheikh Arif Bulbon :There was a family relationship between Kolkata’s popular film actress Rituparna Sengupta and Bangladeshi popular late hero Manna and his wife Shelly Manna. As a result, when Rituparna came to Bangladesh she always met Shelly Manna at her residence. Manna’s production house Kritanjali Chalachchitra is going to ...

International »

Parliament debates no-confidence motion against Modi`s govt


AP, New Delhi :Congress party leader Rahul Gandhi accused the government of failing to live up to its promises as the Indian Parliament on Friday debated a no-confidence motion moved by the opposition against Prime Minister Narendra Modi's government.Gandhi, the scion of the Nehru-Gandhi political dynasty, accused the government of ...

City »

Convenor of Nagorik Oikya Mahmudur Rahman Manna speaking at a press conference on


.

International »

Trump-Putin summit: Democrats call for interpreter to testify


BBC Online :US opposition politicians are calling for Donald Trump's interpreter to testify before Congress about his summit talks with Vladimir Putin.The lead Democrat on the Senate Foreign Relations Committee, Robert Menendez, called for Marina Gross to be subpoenaed to appear at the committee.Controversy has raged over the summit, with ...

Sports »

Minnesota United forward Christian Ramirez (21) is congratulated by teammate Alexi Gomez (32) after his goal during the first half of an MLS soccer match against the New England Revolution in Minneapolis on Wednesday.


Sports »

Ciara (left) and Seattle Seahawks' Russell Wilson present the award for best female athlete to snowboarder Chloe Kim at the ESPY Awards at Microsoft Theater on Wednesday in Los Angeles.


 
Items that you save may be read at any time on your computer, iPad, iPhone or Android devices.
 
Are you new to our website? Do you have already an account at our website?
Create An Account Log in here
Email this news to a friend or like someone
Email:
Write a comment to this news