Woman served tax dues notice after 27 years!

Highlights:

• Dhaka woman receives tax arrears notice after 27 years
• Notice demands unpaid taxes and interest totalling Tk34,468
• Experts call delayed notice gross inefficiency and injustice
• Tax department says no legal bar to recovering arrears
• Officials cite manual recordkeeping and bulk notices as cause
• Law allows tax recovery anytime, even from heirs

A woman taxpayer in Dhaka has been sent a letter asking her to pay outstanding taxes 27 years later. Although there is no legal bar to issuing notices for the recovery of arrears, some experts believe sending such a notice after so many years reflects "gross inefficiency" on the part of the tax department and amounts to "injustice" towards the taxpayer.

According to sources concerned at the NBR, the letter, signed by Salma Khatun, additional assistant commissioner of taxes of Tax Zone 6, was sent to the taxpayer on 7 December. The notice asked her to pay Tk27,534 in income tax for 1997-98 tax year along with Tk4,131 in interest, totalling Tk31,674.

The same notice also demanded payment of Tk719 for the following tax year and Tk2,075 for 2006-07, bringing the total payable amount to Tk34,468.

The notice instructed the taxpayer to clear the outstanding dues by 24 December, warning that failure to do so could result in penalties and even the freezing of her bank accounts.

Dr Syed Md Aminul Karim, former NBR member of the income tax department who served for about 30 years, told The Business Standard, "Sending a notice to an assessee to pay tax arrears after 27 years proves extreme inefficiency on the part of the tax department. If there was any demand, it should have been resolved within four to five years."

Describing the move as an "injustice to taxpayers", he added, "What were that tax zone or its officials doing all these years? Why did they not take any initiative to realise the dues?"

Alamgir Hossain, another former NBR member of the income wing who also served for about 30 years, told TBS, "This is the first time I have heard of a notice being sent for payment of tax arrears after so many years.

"I do not know what reason there could be for such a long delay unless the matter was pending in court."

However, all of them noted that there is no legal obstacle to issuing such a notice.

Attempts to contact Shraboni Chakma, commissioner of Tax Zone 6, by mobile phone were unsuccessful.

Meanwhile, another senior official of the same tax office, speaking to TBS on condition of anonymity, said, "We were urged by the NBR to recover outstanding taxes. While sending notices to everyone in bulk, this taxpayer's file was also included…but had we known it would generate so much discussion, perhaps the notice would not have been sent."

Asked why the notice had not been issued all these years, he said, "Files are stored manually. It is possible that this file was lying somewhere that did not catch anyone's attention."

Clarifying that there was no litigation or reopening issue related to the file, the official added, "If criticism arises like this, officers will not want to work at all."

It was not possible to contact the woman taxpayer who received the notice to get her comments.

At present, there are about 2.2 crore Tax Identification Number (TIN) holders in the country, of whom around 45 lakh submit tax returns.

Under the income tax law, however, tax claims are not time-barred. Even if a taxpayer dies, there are provisions for the tax to be realised from their heirs.