The tax administration in Bangladesh is beset with a host of problems. Old and obsolete laws, inadequate manpower, systemic corruption etc., are among major obstacles that have made it incapable of delivering the desired results. There have been sporadic attempts over the years to infuse dynamism into the country's taxation system. But in the absence of serious efforts to pursue those, the much sought-after dynamism has remained more or less a mirage and things have been proceeding along the traditional way which is marked by non-transparency and lack of accountability.
It was observed on a number of occasions that the revenue collections by the departments under the National Board Revenue (NBR) recorded remarkable improvements. But such improvements had never been due to any change in the existing system. Those were either because of constant pressure from the ministry of finance to beef up revenue collections or due to the leadership quality of the person at the helm of the NBR. However, at the insistence of the multilateral donor agencies, some changes have recently been brought into the tax administration. The formation of the large taxpayers units (LTUs) and efforts to bring more people under the tax net are among such changes. There is no denying that the number of taxpayers in a country of 140 million people is too few and the level of tax evasion by people who can afford to pay taxes is extremely high. The reasons for tax evasion are not difficult to understand. The existing taxation system itself makes things easy if one desires to evade tax.
In the backdrop of such a scenario, the NBR, according to a report published in this paper Saturday, is planning to request the ministry of finance to incorporate provisions into the tax appeal settlement law of 1969 to facilitate interrogation of tax dodgers. The NBR people feel that such provisions would help the tax appellate tribunal deliver fair judgement in the settlement of tax-related appeals since the proposed NBR amendment would make way for quizzing the alleged tax evaders. The report also mentioned about some major problems -- inadequate manpower was one of them -- the tax tribunal had been facing for long. Indifference on the part of the authorities concerned to resolve those has led to the creation of a huge backlog of appeal cases with the tribunal. Under the existing rules, the tribunal has to settle the tax appeals within six months from the date of their registration and failure on the part of the tribunal to take up those cases for hearing results in their automatic disposal.
The move to incorporate provisions in the relevant law to facilitate quizzing the tax evaders and increase the manpower in the tax appellate tribunal to handle the ever-increasing number of cases is a right one, no doubt. But those are unlikely to produce the desired results so far as increasing the tax revenue income is concerned. There is an urgent need to reduce the level of corruption in the tax administration. The NBR itself has recently taken a right move in this direction. It has referred the names of a few corrupt tax officials to the Anti-corruption Commission (ACC) for investigation. Early actions by the ACC could help contain corruption in the tax administration to an acceptable limit. However, the government does need to consider two important issues to get best results out of revenue administration; it should recruit right people for the right job and give them higher compensation packages.