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The National Board of Revenue has been struggling to boost the wealth tax or surcharge over the years, although the number of wealthy people is rising in the country, an NBR official said.
The NBR introduced the tax in the financial year 2011-2012 with the aim of reducing tax burden on marginalised people.
According to Bangladesh Bank data, the number of bank accounts with more than Tk 1 crore in deposit in the country soared by 4,860 to 1.08 lakh at the end of June from 1.03 lakh at the end of March in 2022 as the rich continued to get richer amid increasing economic woes.
Among them, the number of the country’s bank accounts holding from above Tk 1 crore to Tk 5 crore in deposit was 85,841 while the number of accountholders with above Tk 5 crore to above Tk 50 crore in the country reached 22,616 in the period.
According to the NBR, the revenue board collected Tk 600 crore as wealth tax from 15,000 wealthy people of the country in the financial year 2021-2022.
In July-October of the current financial year of 2022-23, the tax authorities managed to collect around Tk 150 crore in wealth tax from some 3,000 people, according to NBR provisional data.
The NBR officials said that they were working with banks, land registry offices and other stakeholders to assess the actual amount of the country’s wealthy citizens.
According to the income tax paripatra 2022-2023, individual taxpayers whose total assets, including liabilities and expenses, limit is over Tk 3 crore and below Tk 10 crore and also have a motor car or have an apartment sized about 8,000 square feet in any city corporation area must have to pay a wealth tax or surcharge at 10 per cent rate on amount of the total assets.
The surcharge rate is 20 per cent for individual taxpayers whose asset limit is in between Tk 10 crore and Tk 20 crore while the rate is 30 per cent for the asset limit between Tk 20 crore and Tk 50 crore.
Taxpayers whose assets exceed Tk 50 crore should pay surcharge at 35 per cent rate.
Research and Policy Integration for Development chairman Mohammad Abdur Razzaque told New Age that the wealthy taxpayers were unwilling to pay wealth tax or surcharge properly due to high rates of surcharge.
‘In most of the cases, they just paid the minimum wealth tax. As a result, the burden of income tax on marginal taxpayers rose,’ he observed.
Wealthy people often do not mention their asset’s current value to avoid the tax and revenue officials are also reluctant to properly verify the financial statements, he said.
As a result, the revenue authorities lose revenues worth over Tk 30,000 crore annually, he said.
He suggested that the government should cut the existing surcharge or wealth tax rates to motivate the wealthy taxpayers.
Former NBR chairman Nasiruddin Ahmed said, ‘The concept of the wealth tax was introduced in the financial year 2011-2012 to cut tax burden on marginal taxpayers.’
Surcharge is collected at the rates set by the government in the national budget on the total value of wealth, excluding exemption limit, he said.
Earlier, the well-off having net assets worth above Tk 2.25 crore had to pay the tax ranging from 10 per cent to 30 per cent of the payable income tax based on their net assets shown in their income tax returns, he said.
The government increased the asset limit to above Tk 3 crore in the financial year 2019-2020, he said.
The limit should be raised to Tk 5 crore to promote the wealthy taxpayers to pay surcharge properly, he suggested.
NBR tax survey and inspection member Md Mahmudur Rahman told New Age that wealthy people needed to pay at least Tk 3,000 each as the minimum surcharge.
‘We are working with other stakeholders to identify wealthy people,’ he said.
According to NBR data, a total 12,400 people paid Tk 540 crore in wealth tax in FY 2017-18, a total 12,600 people paid Tk 550 crore in FY 2018-19, a total 12,800 people paid Tk 600 crore in FY 2019-20 and at total of 14,000 people paid TK 650 crore in wealth tax in FY 2020-21.
(NA)
