The New Nation - Internet Edition

UNB, Dhaka

The government appears to increase the amount of minimum tax for individual taxpayers from Tk 2,000 to Tk 2,500 in an effort to boost the revenue collection.

According to the existing system, an individual taxpayer has to pay 10 percent of his income if it exceeds Tk 165,000 but remains below Tk 275,000. Even if the tax amount remains below Tk 2,000, the individual taxpayer has to pay Tk 2,000 as minimum tax.

"There's a possibility to raise it up to Tk 2,500 to enhance the revenue collection from direct tax, but it's not final yet," said an NBR official adding that more than 50 percent of the total taxpayers are presently paying minimum tax amount as their income tax.

In fiscal 2007-08, the government raised the minimum tax amount to Tk 2000 from Tk 1800 in fiscal 2006-07.

Describing the government plan to raise the minimum tax amount, the NBR official said the government is desperate to increase the revenue collection from direct tax as the revenue income from import duty is shrinking day by day.

"The common trend among our taxpayers is to pay the minimum tax even though many of them are eligible to pay more. That's why the government is thinking to increase the minimum amount for tax," he said.

Currently, some 800,000 people are paying taxes although the number of TIN (taxpayer's identification number) holders is more than 2.4 million. The sources said the government is now putting pressure on the NBR to put in extra efforts for realizing more revenues from direct tax, income tax and VAT.

In this connection, the Ministry of Finance has already asked the NBR to prepare for conducting tax surveys at the upazila level after June.

The NBR sources said Finance Minister AMA Muhith gave directive to increase the number of taxpayers as the target for the next fiscal year's revenue collection would be no less than Tk 60,000 crore.

The government needs to enhance the revenue collection as the sources are shrinking, particularly due to the global economic meltdown, while public spending is increasing.

The Finance Minister, during his visit to the NBR, had emphasized improving the collection from direct tax, saying that the highest revenue collection would have to come from the direct heads.

Besides, the Minister directed the NBR to find out the pockets from where the government could gain revenue.

As part of the government move to enhance revenue collection, the government is likely to be harsh on the tax-rebate facilities in the next budget.

NBR officials said they have got the green signal from the Finance Ministry in this regard and are working accordingly.

Some 200 SROs that were issued for giving tax rebates to certain industries, different sectors and even in case of some individual undertakings will pass through strict vetting this time around, according to the sources.

Finance Minister AMA Muhith on Sunday at a pre-budget discussion at Jatiya Press Club said he would take budgetary measures to simplify the taxation procedure.

"We'll have to try to bag taxes at least from the people having TINs," he said.

The Finance Minister, however, stressed the need for reforming all the three taxation areas - income tax, customs duty and VAT (Value Added Tax) - for the simplification of the taxation system.