Bangladesh needs more taxpayers to drive growth: Muhith

[Homo Sapiens]

https://bdnews24.com/economy/2018/11/13/bangladesh-needs-more-taxpayers-to-drive-growth-muhith

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Bangladesh needs more taxpayers to drive growth: Muhith
Staff Correspondent, bdnews24.com

Published: 2018-11-13 17:19:18.0 BdST Updated: 2018-11-13 17:19:18.0 BdST

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The National Board of Revenue has organised a weeklong tax fair in parts of the country to encourage people to pay tax.




"There was a time when people were reluctant to pay tax; but now many young men are coming to the fair and paying tax," said Finance Minister Abul Maal Abdul Muhith as he inaugurated the fair at the Officers’ Club in Dhaka on Tuesday.

At least 3.5 million people in the country have tax identification numbers. Two million of them file income tax returns. The NBR aims to increase the number of taxpayers to 3.5 million and the number of e-TIN holders to five million.

There was a time when only 700,000 people used to pay tax which has increased to more than three million now, said Muhith.

“I found that around 10 million people pay tax in different ways. There are different types of taxes and number of taxpayers become 10 million if all of those taxes are counted. It is an achievement to have 10 million taxpayers in a country with a population of 160 million.”

“But we are not satisfied with 10 million as the country is developing fast. It should be more.”

People are paying taxes as the present government has been providing different services and the standards of living increased.

“You can now drive to any place in Bangladesh which was not possible 30 years ago. The economy has developed and the income disparity between people has decreased; the disparity still exists but is declining fast.”

The poverty rate has come down to 22 percent from 70 percent, said the finance minister.

“Which means there are opportunities for everyone. However, 22 percent is not insignificant. It means 30 million people. We have to push these people over the poverty line. This is our national goal now and the government is working to realise it.”

More people are paying tax now but the tax-to-GDP ratio is still less than 10 percent, whereas it is 15 percent in the neighbouring countries, said NBR Chairman Mosharraf Hossain Bhuiyan.

The tax-free income limit for general taxpayers remained the same for the current fiscal year, which means those earning less than Tk 250,000 a year are exempted from paying tax. Any individual taxpayer having a disabled child or dependant will have more tax-free coverage.

The NBR has set a target for Tk 1 trillion to realise as income tax and profit tax during the present fiscal year. The target was Tk 777.36 billion in the last fiscal year.

The income tax fair will continue to Nov 19 in seven divisional cities. Also, there will be four-day fairs in all districts and two-day fairs in 32 upazilas. A daylong roving fair will be held in 72 ‘growth centres’ at Upazila level.

The fair offers registration services for potential taxpayers everyday from 9am to 5pm. Also, there will be training in returns submission, tax payment and other tax-related issues.

 

[Michael Corleone]

doesn't mean slap a tax against everything like he's been doing... there are many people who still avoid tax, heck they avoid paying for years of electricity/ water/ gas usage

 

[Nilgiri]

doesn't mean slap a tax against everything like he's been doing... there are many people who still avoid tax, heck they avoid paying for years of electricity/ water/ gas usage

Which is why BD needs tax reform (with aim of better compliance by reducing and simplifying and tieing in with ID etc) rather than complain about few taxpayers (and even worse, keep levels high or increase them).

 

[UKBengali]

Which is why BD needs tax reform (with aim of better compliance by reducing and simplifying and tieing in with ID etc) rather than complain about few taxpayers (and even worse, keep levels high or increase them).

This is exactly what is happening but not quick enough.

Currently tax revenue is increasing at the rate of economy(8%) + inflation(5-6%) but it needs to be more than this in order to increase the tax to gdp ratio.


Tk 250,000 a year seems a too high a threshold to me - I think that maybe it needs to be brought down to Tk 150,000 with 10% tax levied from there upwards. This may bring in a few billion US dollars a year which will be very useful to the government.

 

[Bengal71]

This is exactly what is happening but not quick enough.

Currently tax revenue is increasing at the rate of economy(8%) + inflation(5-6%) but it needs to be more than this in order to increase the tax to gdp ratio.


Tk 250,000 a year seems a too high a threshold to me - I think that maybe it needs to be brought down to Tk 150,000 with 10% tax levied from there upwards. This may bring in a few billion US dollars a year which will be very useful to the government.

250k a year works out to be around 20k per month. In BD majority of the families have only one bread winner. 20k a month in the current economic climate of BD is nothing for a family. If the threshold is reduced to 150k per year, it will literally be oppression on the already struggling families.

 

[UKBengali]

250k a year works out to be around 20k per month. In BD majority of the families have only one bread winner. 20k a month in the current economic climate of BD is nothing for a family. If the threshold is reduced to 150k per year, it will literally be oppression on the already struggling families.

10% tax will be levied over 150K a year(~12K a month) will not make difference to take home income, and will mean that vital revenue will come into government coffers to improve areas like education and healthcare.
Better public services will mean that common citizen will require less money privately.
Public sector spending in these areas is always more efficient than private spending.

 

[mb444]

10% tax will be levied over 150K a year(~12K a month) will not make difference to take home income, and will mean that vital revenue will come into government coffers to improve areas like education and healthcare.
Better public services will mean that common citizen will require less money privately.
Public sector spending in these areas is always more efficient than private spending.

The threshold is fairly reasonable as it is. Public spending is never efficient and particularly not so in BD.

It is better to leave money in the hands of people and let the multiplier effect drive the economy. It is not the number of tax payers that matter but the type of taxpayer. Effort needs to be made to hunt the rich tax evaders, this will yield better result than trying to increase number of tax payer who are lower end of the economic ladder.

 

[VikingRaider]

10% tax will be levied over 150K a year(~12K a month) will not make difference to take home income, and will mean that vital revenue will come into government coffers to improve areas like education and healthcare.

Here is a Bengali song lyrics of a song of bhupen hajarika .

দোলা হে দোলা হে দোলা হে দোলা
আঁকা-বাঁকা পথে মোরা
কাঁধে নিয়ে ছুটে যাই
রাজা মহারাজাদের দোলা, ও দোলা
আমাদের জীবনের ঘামে ভেজা শরীরের
বিনিময়ে পথ চলে দোলা, হে দোলা
হেইয়ানা হেইয়ানা
হেইয়ানা হেইয়া।।

দোলার ভিতরে ঝলমল করে যে
সুন্দর পোষাকের সাজ
আর ফিরে ফিরে দেখি তাই
ঝিকমিক করে যে মাথায় রেশমের তাজ
হায় মোর ছেলেটির উলঙ্গ শরীরে
একটুও জামা নেই খোলা
দু’চোখে জল এলে মনটাকে বেঁধে যে
তবুও বয়ে যায় দোলা হে দোলা।।

যুগে যুগে ছুটি মোরা কাঁধে নিয়ে দোলাটি
দেহ ভেঙ্গে ভেঙ্গে পরে হো পরে।
ঘুমে চোখ ঢুলু ঢুলু রাজা মহারাজাদের
আমাদের ঘাম ঝরে পড়ে হো পড়ে
উঁচু ঐ পাহাড়ে ধীরে ধীরে উঠে যাই
ভালো করে পায়ে পা মেলা
হঠাৎ কাঁধের থেকে পিছলিয়ে যদি পড়ে
আর দোলা যাবে নাকো তোলা
রাজা মহারাজার দোলা
বড় বড় মানুষের দোলা
ও দোলা আঁকা-বাঁকা পথে মোরা
কাঁধে নিয়ে ছুটে যাই
রাজা-মহারাজাদের দোলা
হে দোলা হে দোলা হে দোলা
হে দোলা।।
@UKBengali , I am not surprised at all. I expect exactly this revolutionary idea from a person who has no idea about the life of poor peoples .

In your regime peoples go to jail because they can't pay bank loan of 85000 tk ( 1000$) , and peoples who do not pay billions of tk, become MP or their patron.
Now you are trying to rob food from the poor as tax to digest it in the fat belly of your finance minister.

no tax should be paid if income is under 30 thousands, because we are already paying VAT..
And rich should be paid more than 50% individual tax.

 

[Bengal71]

10% tax will be levied over 150K a year(~12K a month) will not make difference to take home income, and will mean that vital revenue will come into government coffers to improve areas like education and healthcare.
Better public services will mean that common citizen will require less money privately.
Public sector spending in these areas is always more efficient than private spending.

12k in BD in nothing, you have no idea what kind of miserable life people live with that kind of income. It's not even sufficient for one man to live the life of a human, let alone families.

The tax revenue needs to increase but that should be increased by properly taxing the taxable people. There are doctors in BD who earn 500k to 1 million taka per month, there are lawyers who earn more than 100k a month, many shop owners earn 50-60k per month, they should be made accountable and made to pay their due share. Same applies to the big corporates and super rich who evade tax. Also, I think a progressive taxation system should be implemented in BD like we have in Australia. For example, for less income less tax should be charged, for higher income a higher percentage should be charged. In Australia, we get charged 37% for the bracket of 90k to 180k, anything above 180k is charged at 45%.

 

[Michael Corleone]

Which is why BD needs tax reform (with aim of better compliance by reducing and simplifying and tieing in with ID etc) rather than complain about few taxpayers (and even worse, keep levels high or increase them).

hopefully someone takes up the task to bring the morons in the ministry up to date on things like this

 

[UKBengali]

12k in BD in nothing, you have no idea what kind of miserable life people live with that kind of income. It's not even sufficient for one man to live the life of a human, let alone families.

The tax revenue needs to increase but that should be increased by properly taxing the taxable people. There are doctors in BD who earn 500k to 1 million taka per month, there are lawyers who earn more than 100k a month, many shop owners earn 50-60k per month, they should be made accountable and made to pay their due share. Same applies to the big corporates and super rich who evade tax. Also, I think a progressive taxation system should be implemented in BD like we have in Australia. For example, for less income less tax should be charged, for higher income a higher percentage should be charged. In Australia, we get charged 37% for the bracket of 90k to 180k, anything above 180k is charged at 45%.

I well appreciate that 12K a month is not enough for a family to lead a decent life but BD is a poor country.
However anyone earning above 12K a month should be taxed at 10%. If someone is earning 20K a month they would be taxed 10% on 8K, which would be 800Tk. This would hardly make much difference to them but could bring in billions of US dollars into the exchequer to spend on health and education. Ultimately losing a little money through taxation would benefit them as they would then need to spend less on education and healthcare services.
I agree that a major effort should be made on the wealthy tax cheats but everyone needs to contribute to allow the government to spend money on necessary areas.