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The government is considering introducing a unified tax collection system at certain rates on total income of an individual or company instead of the existing system.
The National Board of Revenue (NBR) has been asked to prepare a draft concept paper in this regard, officials said.
The National Committee for Monitoring of Doing Business Reforms (NCMID), held at Bangladesh Investment Development Authority (Bida) in October last year, had decided to explore the possibilities of the system and requested the NBR to prepare the concept paper.
In a recent letter, Bida has requested the NBR to let it know the progress and submit the paper before the next meeting of the committee.
Currently, the NBR collects income tax, value added tax (VAT), and other taxes separately from a taxpayer.
Sources said the government would take a final decision in this regard based on the draft concept paper and stakeholders opinion.
The NCMID had also requested the NBR to introduce an online submission system of corporate tax returns and a tax correction system by next six months.
Officials said introduction of a unified tax collection system depends on the political decision of the government, not the bureaucracy.
Currently, the income tax wing collects taxes based on the annual income of an individual or companies.
VAT is a consumption tax that people have to pay at the time of availing different services or purchasing goods.
The Customs wing collects duties and taxes on import and export of products.
Official sources said the time and cost of paying taxes on doing businesses will reduce significantly if the proposed system is launched in Bangladesh, which lags behind most of the neighboring countries on paying tax reforms.
On paying tax, Bangladesh’s rank is currently 151 in the global index.
The rank remained almost stagnant for several years due to lack of reforms in tax administration and tax measures.
In the Ease of Doing Business Report-2020 of the World Bank, the ranking of India is 115, Bhutan 15, Sri Lanka 142 and the Maldives 119, Malaysia 80, Thailand 68, Indonesia 81, Vietnam 109, Cambodia 138, and Singapore 7.
However, Bangladesh’s position in the paying tax index is better than those of Pakistan, Nepal and Afghanistan that ranked 161, 175 and 178 respectively.
(DT)
