TIN holdings up but revenue low
Al Amin :
The National Board of Revenue (NBR) has registered over 14.18 lakh fresh Tax Identification Number (TIN) holders in last one year. But, despite the increase in the number of returnees, the tax collection has not increased proportionately.
The taxation through the return submissions occupied only 5.6 per cent of the total direct tax and the rest is being collected through third parties like banks.
The number of total TIN holders in the country has stood at 98,34,615 as the NBR has registered 14,18,486 fresh TINs till December of 2023. The number of TINs was 84,16,129 till December of 2022, according to data of the revenue board.
Experts think that the number of TIN holders is expanding significantly in the last one year as return submissions have become mandatory to get some government and private services.
They said Bangladesh’s 9 per cent tax GDP ratio – which is the lowest in the world – is due to the poor direct tax structure and the taxation needs a recast and currently revenue measures include 65 per cent indirect and 35 per cent direct taxes.
Dr Ahsan H Mansur, Executive Director of the Policy Research Institute (PRI), told The New Nation, “Earning from direct tax is not increasing at the ration of increasing number of TIN holders due to weakness and mismanagement in tax collection system.”
“On the other hand, a huge amount of taxes have been remaining unpaid for year after year due to the weakness,” he added.
The NBR data showed that the outstanding taxes were Tk 55,261 crore till July of 2023. NBR, however, managed to collect Tk 1,939 crore from the dues till last December and still the figure is Tk 53,321 crore.
Pointing out Bangladesh’s growing inequality and low government spending compared to the GDP, Mohammad Abdur Razzaque, Chairman of Research and Policy Integration for Development (RAPID), held low direct tax responsible for it.
Meanwhile, incomes from the direct tax have increased by 15.82 per cent to Tk 51,824 crore in the first six months (July-December) period of the current fiscal year (2023-24). The amount was Tk44,742 crore in the corresponding period of last year, the NBR data said.
The government is beating the drum enthusiastically on raising the number of taxpayers and returns filings, but despite these sincere efforts of it, taxation through return submissions occupied only 5.6 per cent or Tk 6,347 crore of total income tax revenue streams of the last fiscal year.
In a bid to boost return submissions, the NBR has been mostly focusing on organising events, opening new tax offices, and issuing tax cards to top taxpayers. But the lion’s share of income tax revenue is still being collected by third parties such as banks.
The NBR collected Tk 1,13,346 crore income tax in FY23, of which more than 94 per cent came through outstanding taxes, advance income taxes, travel taxes and source taxes.
Source taxes accounted for Tk 77,738 crore or 68.58 per cent of the figure in FY23, and the country depends heavily on this revenue stream. This tax is deducted by government entities and private firms.
According to a recent survey conducted by the Centre for Policy Dialogue (CPD), nearly 68 per cent of people with taxable income do not pay taxes.
