NBR targets those misusing reduced tax rates for fisheries

The National Board of Revenue (NBR) intelligence unit has launched an investigation into individuals who have exploited reduced tax rates by falsely reporting large incomes from the fisheries and poultry sectors.

In addition to the Central Intelligence Cell (CIC) and the Income Tax Intelligence and Investigation Unit, several tax commissionerates have reopened the tax files of at least 15 individuals and are reviewing their bank statements.

This week, the Tax Intelligence and Investigation Unit examined the bank accounts of four top officials of a big conglomerate. A senior tax intelligence official said these individuals benefited from the reduced tax rate by reporting an income of about Tk140 crore from the fisheries sector.

Abdur Rakib, commissioner of the Income Tax Intelligence and Investigation Unit, confirmed that the tax files and bank account details of the four were reviewed.

He stated, "We will request the necessary income documents, conduct physical inquiries, and seek information from relevant departments."

The review process has expanded to include at least 30 more individuals who have claimed reduced tax rates by reporting large incomes from this sector.

In total, at least 100 individuals, most of whom have reported incomes of Tk50 crore or more, are under investigation.

Additionally, the CIC has searched the bank accounts of 10 politicians and their families, including a former FBCCI president and former Dhaka South City Corporation mayor Sheikh Fazle Noor Taposh, for taking tax benefits by reporting large fisheries sector incomes.

Currently, the maximum tax rate for individuals is 30%, but income from the fisheries sector is taxed at a maximum of 15%. Experts believe that certain politicians, bureaucrats, and businessmen have exploited this loophole to legalise illegally obtained money.

According to NBR data, income from the fisheries sector gets tax exemption for the first Tk10 lakh, with a 5% rate on the next Tk10 lakh, 10% on the following Tk10 lakh, and a 15% cap for incomes exceeding Tk30 lakh. In contrast, ordinary individual taxpayers face significantly higher tax rates.

NBR officials have indicated that the reduced tax rate for the fisheries sector may be revoked in the next budget, requiring income from this sector to be taxed at the regular rate.

However, to protect marginal fish farmers, a plan is in place to exempt incomes up to Tk5 lakh or a maximum of Tk8 lakh, they added.