Tax exemption policy at final stage: NBR chief

The National Board of Revenue (NBR) is in the final stages of preparing a tax exemption policy, its Chairman, Md Abdur Rahman Khan, said today (27 March).

"It [draft of the policy] is now at the final stage, stating that the government and the NBR will not give any tax exemption; rather, the Jatiya Sangsad will give that. We are making the policy stricter," he said in a pre-budget meeting with the Retired Tax Officers' Welfare Association at the Revenue Building in the capital's Agargaon area.

He also made it clear that no individual, other than in the interest of the republic, will be considered eligible for tax exemptions.

According to available NBR data, individual taxpayers received over Tk40,000 crore in tax exemptions, more than double the amount provided to the companies.

When tax exemptions are granted for social welfare purposes under the specified provision, some people with undisclosed money also tend to exploit these benefits to pay taxes at reduced rates in certain cases.

"It is now at the final stage, stating that the government and the NBR will not give any tax exemption; rather, the Jatiya Sangsad will give that. We are making the policy stricter."

– Md Abdur Rahman Khan, Chairman, NBR

Tax exemptions are also provided to promote local industries, encourage investment in backward areas and high-tech industries and attract businesses to economic zones.

However, there are complaints that some industries have been exploiting tax exemptions for years by using their influence or by unethical means.

According to the NBR, some 102 types of sectors currently receive partial or full tax exemptions. Forty of these exemptions are applicable to individual taxpayers, while the remaining are applicable to companies, industries, or investments.

The NBR claims that widespread tax exemptions are costing the revenue board a significant amount of revenue, while no study has been done yet to assess the impact of these exemptions.

Md Abdur Rahman Khan several times referred to a study showing that the NBR gives the same amount of tax exemptions as it collects as revenues.

The revenue collecting authority is thinking of rationalising the taxpayer-related issues, he said, adding that this time, the government wants earnestly to restore discipline in the revenue sector.

Abdur Rahman Khan said that zero return submission is almost two-thirds of the total income tax return. "I have asked the field-level officials why they are not serving notices to these taxpayers," he said.

He also emphasised the enhancement of operational efficiency and functional competence among the tax officials.