Sherpa Hossainy's Blog

Modernisation of tax payment

Posted in Bangladesh, Business, Dhaka, Economy, Finance by Sherpa Hossainy on September 14, 2011

Published in The Independent on 7 September 2011

Read the article on Independent website
Digital print edition

Digitisation of the country’s tax collection system is now under process for a better revenue income for the government.

International donors are expected to hold a meeting next week with the National Board of Revenue (NBR) on financing modernisation of the system.

Asian Development Bank (ADB), International Finance Corporation (IFC) and International Monetary Fund (IMF) delegates are likely to discuss supporting NBR for its automation project on September 11.

“We will seek financial and technical support from the donors in the meeting for the modernisation process of NBR,” Nasiruddin Ahmed, chairman of NBR, told The Independent on Tuesday.

The modernisation plan includes online tax payment system and tax return submission, arranging intra-organisational connectivity and building up a well-organised tax collection system.

The revenue collection authority will also use these funds to provide training for NBR officials and develop the backbone for the online system, Ahmed said.

Executive Committee on National Economic Council (Ecnec) on August 2 approved the NBR Automation Project across the country that aims at bringing one crore people under tax net within the next three years.

The Ecnec also approved the online tax return filing and digitalised taxpayers’ information service centre project last week.

Some income tax offices, including the Large Taxpayers Unit (LTU), have already introduced the online tax return submission system, while the NBR plans completion of  its online tax return filing and submission process by 2013.

According to the project working paper of NBR, Bangladesh has the lowest ratio of direct tax and GDP in the sub-continent — only 2 per cent. The tax-GDP ratio in India is 6 per cent and in Pakistan 4 per cent.

“We hope to get support from the donors to implement our five-year modernisation plan that would raise the tax-GDP ratio to 13 per cent by 2016,” Ahmed said.

Another NBR study also revealed that there are one crore capable tax payers in Bangladesh but only 10 lakh submit their tax returns on a regular basis. Currently, the number of Tax Identification Number (TIN) holders is around 32 lakh.

The NBR would need around Tk 700 crore for its automation and streamlining the tax administration, NBR sources said.

The tax administration received an urgent fund of Tk 61 lakh from the finance ministry early last month to develop a training institute for the customs officials.

The NBR chairman also hoped for continued support from the finance ministry in this regard.

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