Automation, skilled tax officials needed for boosting revenue collection: Experts

Experts have urged the authorities to invest in automatising the tax collection system and developing tax officials' skill to achieve high growth and become a developed country.

Tax officials should be trained by organisations like Institute of Chartered Accountants of Bangladesh (ICAB) for holistic learnings, so the government needs to invest more in this regard, Chartered Accountant Snehasish Barua said at the seminar titled "100 years of Income Tax Law of Bangladesh – Expectations and Achievements" at Gulshan Club Saturday.

Calling for spreading the tax net across the country, he said, currently, revenue is heavily dependent on Dhaka and Chattogram. Dhaka accounts for around 74% and Chattogram for around 16% of revenue collection.  National Board of Revenue (NBR) offices should be set up in every upazila.

Snehasish Barua said along with the NBR, services at statutory organisations like the National Savings Directorate, the Bangladesh Road Transport Authority, the Department of land Records and Survey, the Integrated Budget And Accounting System and the city corporations should be automatised for smooth revenue collection.

He said income tax, VAT and customs authorities should be integrated and different governing bodies should work in coordinated fashion.

Presenting the keynote at the seminar, Snehasish Barua said the country's yearly revenue collection increased from Tk91,593 crore to Tk300,200 crore in the last 10 years.

Planning Minister MA Mannan, who was the chief guest at the programme, said, "The NBR needs reform. Many people have become tax officials after studying subjects like history or geography. They have to learn the skills on the job as they stumble along the way.

"When such officials stumble, they not only break their own legs, but also the legs of those who seek services. We need to reform this system a lot. I think the prime minister also wants reform, but due to some vested quarters, she is facing obstacles in every step. We have to overcome it and reform the system."

He also said people have to assist the government by paying taxes to ensure living standards as well as to make possible huge infrastructures like the Padma bridge.

Humayun Rashid, president of International Business Forum of Bangladesh, said currently the country's tax-to-GDP ratio is only 9.9% and to become a developed country it has to be increased to around 18-20%. The tax-to-GDP in India is 21.50%, in Nepal 14.88%, and in Pakistan 12.74%.

He also said the country needs to reduce the cost of doing business here.

Abdul Haque, ex-president of Japan-Bangladesh Chamber of Commerce and Industry, said, "There are many good officers in the NBR. But there are also some deputy commissioners who have cars worth Tk50 lakh, which I still do not dare to buy even after running a business for 50 years. Reform is needed here."

Former NBR member (tax policy) Md Alamgir Hossain said, "To improve the NBR officials' skills, we need a full-fledged academy with sufficient resources and long-term training programmes. Expecting that a six-month programme is sufficient for training someone in complex income tax law, accounting and business processes is very ambitious."

He further said, "We could not make the people aware about tax obligations. We have to provide services at people's doorsteps. Currently, the NBR has offices in 82 upazilas out of more than 460 upazilas in the country and the government is working to increase it. Out of 18 crore people in the country, only 22 lakh pay taxes."

MS Siddiqui, an economist and adviser to Bangladesh Competition Commission, said there are still malpractices in tax affairs. Increasing the tax-to-GDP ratio is impossible without a dynamic tax law.

Former NBR chairman Dr Muhammad Abdul Majid said there will be no discrimination in the country if a prudential tax law is introduced.

AF Hassan Ariff, former attorney general and former advisor of the caretaker government, Hafizur Rahman Khan, ex-president of IBFB, and Lutfunnisa Saudia Khan, vice president (finance) of IBFB, among others, spoke at the event.

Income Tax Act 1922 was effective in Bangladesh since its independence. It was replaced by the Tax Ordinance 1984. The authorities have prepared the draft of Income Tax Law 2022.