The new income tax law drafted by the tax authorities shows a number of efforts to improve taxation, but it still fails to keep up with the changing business landscape, according to businessmen and legal experts.
In a webinar hosted by the International Business Forum of Bangladesh (IBFB) on Saturday, business leaders pointed out different issues in the bill, such as excessive withholding tax and withholding tax, certain higher tax brackets for non-resident Bangladeshis and the granting of Power Discretionary Income to officers.
In the keynote speech, the former chairman of the National Revenue Board, Muhammad Abdul Mazid, said there had been attempts to impose a legal framework and revenue narratives on individuals and businesses.
“But there will be loopholes if the law is hastily finalized without discussions with stakeholders.”
Muhammad Abdul Mazid said the changes to the income tax law should not disappoint taxpayers. He suggested that the tax authorities should not enforce the law by simply issuing a statutory regulatory order while circumventing parliament.
The focus on withholding tax, efforts to consolidate similar income rules, automation of tax refunds, and clarification of certain income topics in the bill have earned appreciation of the former head of the revenue board.
Meanwhile, business leaders said the appeals tribunal and alternative dispute resolution should be separate from the revenue board.
“The business landscape in the country has changed a lot, and the new law should be finalized in light of that,” said Humayun Rashid, chairman of the International Business Forum of Bangladesh.
Referring to the discretion given to tax officials in the law, he warned against abuse. He also called for greater engagement of the private sector in drafting the law aimed at bridging the gap between the public and private sectors.
Focusing on making the proposed law more business- and taxpayer-friendly, Humayun Rashid proposed bringing the entire population of the country under tax coverage.
“People who will be eligible for income tax will pay it. But everyone should submit an income and expense account,” he argued in favor of the proposal.
As the main guest of the program, the Minister of State for Planning, Prof. Shamsul Alam, suggested making the bill suitable after talking to stakeholders.
“Without a needs-based tax structure, capacity building and automation of tax authorities, the gap between tax administration and the private sector would not be minimized,” the Minister of State said.
Forum Vice President MS Siddiqui, forum member and also former Attorney General AF Hassan Ariff, University of Dhaka Accounting Professor Mohammad Tareq and former Revenue Council member Md Alamgir Hossain also took the speaking during the program.