'Focus on tax evaders': Zero tax payers lament proposed new rule

Illustration: TBS

After losing his job during the coronavirus pandemic, Robiul survived on some small seasonal businesses. His income still remains very limited. 

He registered for TIN back in the day when he had a job. However, he is one of the eight lakh TIN holders who submit zero tax returns. The proposed government move to impose Tk2,000 in taxes on zero returners, revealed in a TBS report on Monday, has left Robiul worried. 

"It will be a huge pressure on me. My income is zero now. If you charge me Tk2,000, this is a big burden on me," Robiul said. "Many in my circle lost their jobs during the pandemic and have remained unemployed ever since. We have our TINs. Now if you impose taxes on us, even though our income is untaxable, people will look for loopholes to avoid it." 

Of 86 lakh TIN holders at present, 32 lakhs submit tax returns. Of them, around eight lakhs submit zero returns. The government can generate additional revenue of Tk160 crore if these eight lakh people are made to pay Tk2,000 in taxes.

Also, considering the 86 lakh TIN holders, if all of them (62 lakhs) are taxed Tk2,000 along with 24 lakh people with taxable income, the government can generate an additional Tk1,240 crore in revenues. 

Besides, the NBR is also planning to extend the public and private services mandatorily required to file tax returns. It is mandatory for 38 sectors at present. This could also potentially increase the number of TIN holders. 

While this decision, will likely help increase government revenues, zero tax returnees we interviewed said this drive to generate revenues through them is misplaced. 

"Ask them to focus on tax evaders instead who dodge crores in taxes. If you get hold of the tax evaders, you will get a hundred times more in revenues than what you might possibly get from zero tax holders," Rabiul said.  

"The NBR goes easy on rich people," he said. "When I worked at a company I saw with my own eyes how they managed to turn Tk1.5 crore taka in taxes to Tk50 lakh." 

Where are my benefits against taxes? 

Habiba Sultana is an MPhil student at the University of Dhaka. She registered for her TIN a few years ago when she worked for an organisation that paid decently. 

"I paid my taxes and submitted tax returns. But now that I am not working and don't earn anything, why do I have to pay the minimum tax? I will have to borrow the money or ask for it from someone. How is that fair? It does not make sense," she said. 

Habiba also has experts on her side. 

Snehasish Barua, a tax consultant, told The Business Standard that if a person has to pay tax despite not having taxable income, it goes against the spirit of the "no income, no tax" policy. 

The government is also reportedly planning to introduce a new provision for the deregistration of TIN for the first time. In the event of death or no income, the taxpayers will have the opportunity to apply for de-registration of their TINs by providing "valid reasons" to the tax authorities.

An NGO worker, on the condition of anonymity, said that he doesn't mind paying taxes but he wants that his taxes are well-spent for his benefit. 

"I have no problem giving taxes. But is my tax money properly utilised in Bangladesh? I don't think so. We don't have access to the most basic of benefits that we should have against the government collecting taxes from us," he said. 

Registering for TIN has landed me in trouble

Khaled HM Bari works in the textile sector. He registered for a TIN number a few years ago. So far, he has submitted zero tax returns in 2021 and 2022. 

He doesn't like the idea of a blanket Tk2,000 in taxes. "This is a deviation from the government policy of tax-free income and taxable income. I have so far submitted zero tax returns twice. Now I will have to submit Tk2,000 [if the proposed decision is approved] even though my income has not reached the taxable amount," Khaled said. 

"Now, I feel like registering for TIN has landed me in trouble. This will certainly discourage people from registering for TIN in the future," he added.