Govt takes move to formulate new Income Tax Law
Saturday 09 September, 2017 06:19:38 pm
Fahad Ferdous, UNB Staff Writer
Dhaka, Sept 9 (UNB)- The government has taken an initiative to formulate a new Income Tax law scrapping the decade-old Income Tax Ordinance, 1984 and excluding the scope of brining any change to income tax related matters through Statuary Regulatory Order(SRO).
According to the National Board of Revenue (NBR) currently the government can bring change to any tax related matters through SRO. In the proposed law this scope would be omitted totally.
“However, this sort of scope can be used during emergency period or national disasters,” a senior official of the NBR told UNB.
Imposition of new tax must be passed by Parliament as per the proposed law, he said adding the proposed income tax law will be drafted in Bangla in line with a previous directive from the High Court.
The new law will have tax exemption scopes but it would not be used indiscriminately. “This will be done considering emergency situation or to facilitate investment in the country,” the NBR official said.
There will be no major changes in income tax return but it will pave the way to submit the return digitally.
The NBR official said that the new law will be simple, pro-taxpayers, investment-friendly and hassle-free one.
“We want to set up an easy atmosphere for the taxpayers of the country where they will feel encouraged to pay their taxes, we are moving towards that and soon this will be visible,” the NBR official said.
The government is in a move to improve the tax-GDP ratio to 15.3 by 2019 from its currently poor level of 10 percent.
Currently, the number of taxpayers in the country is 29,28,093. These taxpayers provide 37 percent of the total revenue. The government is in a move to increase this ratio to 50 percent by 2020-21.
According to an official document, the number of income tax return in 2016-17 has been increased by four lakh comparing to the previous fiscal (2015-16).
The proposed law, ‘Income Tax Law, 2017’, was placed before the cabinet on August 22 for approval, but the cabinet returned the proposed law for further scrutiny and amendment. It was asked to place the proposed law after these works.
The income tax system of the country is running by an ordinance of 1984 with some amendments.
The move to update the country's income tax law started as far back as 2010-11, when the direct tax law was first drafted with support from the International Finance Corporation.
The NBR posted the draft on its website for opinion from stakeholders, but the feedback was not positive.
The NBR revised the draft to 'Direct Tax Code 2013'. Even after the revision, the draft received negative feedback from many quarters including the IMF mentioning that that it was far from the international best practices.
At a consultation meeting in February last year, a good number of businessmen and former tax officials recommended taking the local reality into consideration before passing the draft.