Al Amin :
The National Board of Revenue (NBR) has directed the tax zones to take proper steps to collect outstanding taxes by preparing an updated list of income tax arrears with a view to increasing tax collection achieving the annual target.
The NBR has set a target of Tk1,54,800 crore for revenue collection from the income tax wing in the current fiscal year (2023-24), which is 26.87 per cent higher than the previous financial year.
Realizing the target, NBR has adopted various strategies to collect the additional revenue amid the slowed economic activities caused by Covid-19 pandemic and the Russia-Ukraine war.
One of the strategies is to increase revenue collection from arrears as the outstanding taxes are growing significantly in the last few years, the NBR officials said.
According to the latest data of the NBR, the tax officials had been able to collect Tk 2,855.37 crore against the total amount of income tax arrears worth Tk 32,163.25 crores (disputed and undisputed) in the fiscal year 2021-22.
The income tax arrears were Tk 26,005.47 crores, but the collection was only Tk 2,877.567 crores in FY ’21, while the revenue board was able to collect Tk1894.2 crores against the dues worth Tk 24,421.88 crore in FY’20, according to the NBR data.
Although the outstanding taxes are growing, the NBR is able to collect very little.
Under the circumstances, the revenue board has directed all the tax zones to prepare an updated list of outstanding income taxes and to collect the dues taxes by setting up targets on a monthly basis, the NBR officials said.
Tax officials said a major portion of the outstanding taxes are disputed and it is not possible to collect the money without the final settlement of the legal procedures, although the collection from undisputed arrears is yet to be reached the desired level.
Syed Aminul Karim, former NBR Member (Tax), told The New Nation, “The reasons behind the increase in income tax arrears are mainly a decline in income of the taxpayers amid slowed economic activities, failing to arrange face-to-face hearing during the Covid-19 pandemic and delay in legal procedures.”
Besides, some taxpayers delay willingly as the NBR cannot be able to take any action against them, he added.
The Large Taxpayers Unit (LTU, Tax) among the 31 tax zones of the NBR has the highest arrears, amounting to Tk 8,382 crore in the FY ’22, which was Tk8290 crores in the previous FY ’21.
NBR former chairman Dr Mohammad Abdul Mazid said that the NBR can take strong legal action including seizure of bank accounts against the tax defaulters if the taxpayers don’t respond after issuance of show cause notice.
“Sometimes, the taxpayers take shelter in legal procedures to delay the payment delay. But, we must come out of the tax defaulting culture,” he added.
Several officials said NBR has plunged into various problems including manpower shortage, lack of logistics and technical support and lack of law enforcement capacity. As a result, it is not possible to collect income tax from the arrears.
Besides, tax officials have to work with big revenue collection targets every year, for which the officials can’t pay attention to collect the outstanding dues, the officials said.
In some cases, tax officials issued several claim letters to tax defaulters but the taxpayers don’t respond as the NBR is unwilling to take any action against them, the officials said.