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PROGRESS in tax collection is vital for good governance. For undertaking all sorts of developmental and welfare activities, the government needs resources which are to be supplied in a major way by the taxes it collects from people. But collection of taxes in Bangladesh is considered as far below the potential specially in the realm of direct taxes. Beside, taxation to do justice should aim to collect more from the ones who have taxable income. But it is regrettable that in the Bangladesh context, taxes are evaded very largely by the ones who are able to pay taxes or ought to pay taxes in proportion to their true income. Thus, the common man is found to be the burdened one when it comes to paying taxes because he may not have taxable income but he is, nonetheless, required to pay the burden of all sorts of indirect taxes which are tagged to the prices of commodities or services. The not-too-affluent ones are also found to be forced to pay direct taxes from whatever taxable surplus remains from his modest income whereas the big ones 'manage' tax evasion. Therefore, both the purposes of getting more out of taxes to be able to increase availability government's resources as well as doing social justice in the process, remain quite unmet.
According to reports, only three thousand persons out of a population of over 140 million in the country have stated their income to be above one million Taka in the latest income tax assessment. This is simply unbelievable because at least 10 million people are there in the population who are rich or very rich and their annual wealth or income are many times more than Taka 1.0 million. Thus, from this figure alone, it should be amply clear to what extent tax payments are being evaded by those who should be under moral and practical compulsions to pay taxes. There are many people in the country who regularly spend well over a million Taka in lavish wedding ceremonies or in paying for the yearly educational expenses of their children. Every day in the big cities, expensive cars with prices in the neighbourhood of Taka 10 million or more are being bought without a care. Millions of Taka are deposited in the accounts of real estate developers at one go to purchase luxury flats and buildings. But the same people who indulge in such glaring exhibit of their rich and luxurious lifestyle can quite afford to hide their real income or wealth and get away without paying any taxes or paying only pittances. The total number of income tax payers in the country is about 1.7 million although it is officially admitted that this number should be at least 2.5 million. The figures go to only underline the extent of tax evasion and the gross prevailing injustices in the taxation system. Reportedly again, even among the 1.7 million registered income tax payers, only about 0.5 million of them have submitted their tax returns in time this year.
This is a very shocking picture of tax collection in the country. No amount of only talks of reforming the tax administration will do. The need is immediate corruption-free real activism of the National Board of Revenue (NBR) and at the heart of it must be the full activation and sincere working of the large tax payers' units. The units are theoretically in existence but remain functionally immobile. The challenge is to make them work with full flair backed up by scrupulous and dedicated support from the tax intelligence units.
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