Only change of politics can help investment, not what Investment Board says
THE Revenue Board has dismissed a number of proposals from the Bangladesh Investment Development Authority (BIDA) that the latter feels would help ease doing business in the country. In one proposal, the BIDA has suggested relaxing tax burden, in the form of VAT (value added tax), on financially-vulnerable companies. It is not logical to relax VAT payment provision as the companies collect the indirect tax from consumers, the National Board of Revenue (NBR) said in an opinion sent to the BIDA.
The NBR also declined to accept another BIDA proposal for the submission of VAT returns on a quarterly basis instead of the existing monthly filing. They say that it's the law and the consumers pay VAT instantly on buying any good. The NBR has also ruled out another proposal from the BIDA regarding risk-based investigation while providing VAT registration.
In Bangladesh, taxpayers have to make 33 payments each year while the number is 26.7 in South Asia and 10.3 in OECD's high-income country. The process of tax payment needs 435 hours per year in the country. It is 273.5 hours in South Asian countries and 158.8 hours in OECD high income countries. Taxpayers contribute 33.4 per cent of their profit as tax in Bangladesh, lower than the South Asian average of 44 per cent.
We know that something is wrong with NBR when the President of the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI), Sheikh Fazle Fahim says investigations should be opened against a section of officials and consultants of the National Board of Revenue (NBR).
They have completely failed to implement the online VAT system as it would reduce the powers of the field officers and the VAT Commissioners. Creating zones for VAT collection is the main reason of harassment, where Commissioners determine everything. This system exists nowhere in the world. Nobody has supreme authority in other countries.
But the NBR officials have resisted change and have also failed to set up the online system so that their powers for being the final tax authority remain unchanged. They will not let go of their precious powers without a clear directive from the government with regard to implementation of tax reform. But this is a must for our businesses to remain competitive with the rest of the world. The NBR must let go of their medieval fiefdom.
Â Investment depends on political atmosphere for political stability. We need to save from the grip of bureaucratic money making corrupt administration. The disagreement or agreement between Board of Revenue and Board of Investment is useless other than showing they exist.