15,000 taxpayers pay surcharge

Taxpayers living in Dhaka’s middle class residential area from Old Dhaka to Motijheel’s Colonypara, Shahjanapur, Khilgaon and Basabo pay more surcharge than the taxpayers from the capital’s upscale areas including Dhanmondi, Gulshan, Banani, Baridhara and Uttara.

Records of the taxpayers for the last several years at the National Board of Revenue (NBR) shows the tax zone-15 has been ranking top in surcharge for the last three years with more than 1,000 taxpayers paying this.

According to the NBR, people with net worth of Tk 30 million (3 crore) or more have to pay the surcharge on their income at various rates. Some 14,700 taxpayers paid surcharge in 2019-20 fiscal.

The actual number of people with worth of at least Tk 30 million is higher. Many people do not allegedly shows wealth on tax documents.

Directors and owners of big companies, for example, are registered with the Large Taxpayer Unit (LTU). According the NBR annual report, 524 taxpayers registered with the LTU submitted their annual income statement in 2018-16 fiscal and 298 of them paid surcharge.

This indicates owners of big companies lead a lavish life but they evade surcharge.

There are lots of people leading upscale, extravagant lives in the capital’s posh areas including Dhanmondi, Gulshan and Banani. The price of an apartment is no less than 30 million (3 crore) in these area. BMW, Mercedes, Porsche, Lexus and such expensive cars move on Dhaka streets , but many of the owners do not pay surcharge.

Why is the surcharge not being realized from the affluent? In reply, NBR member (tax policy) Alamgir Hossain told Prothom Alo surcharge is fixed based on the price of property of the taxpayers. The price is shown on tax documents. So, the property value that was 10 years ago will be much more 10 years later. But surcharge is fixed based on the information provided in tax documents.

Also, when the documents are prepared, the actual price is down scaled. As a result, tax documents do not also reflect the actual value of the property, he added.

According to a report of the financial consultancy firm Wealth-X released on May 2020, Bangladesh topped the list of countries that saw the fastest growth in the number of rich people between 2010 and 2019. The country witnessed 14.3 per cent rise in the rate of population with net worth of $ 5 million or more during that period.

According to NBR sources, taxpayers from capital's Paltan, Bijaynagar, Fakirapool, Motijheel’s Bank Colony, Gopibagh, Joy Kali Temple, Abhay Das Lane, Kamalapur, Shantinagar, Khilgaon, Shahjahanpur and Basabo submit returns at tax zone-15. Officials of several government banks are also under the jurisdiction of this tax zone.

Tax zone-10 comes in second after tax zone-15. More than 800 taxpayers pay surcharge with tax zone-10 and 25,000 physicians are registered with it.

Besides, there are about 2,000 taxpayers paying a surcharge at three tax zones in Chattogram while Barishal division has the lowest taxpayers paying surcharge, only 59.

The surcharge was introduced in 2011-12 fiscal with setting a limit at Tk 20 million (2 crore) or more. The number of people with such amount of wealth has increased by three-and-a-half fold in the last six years.

As many as 4,446 taxpayers submitted returns and paid Tk 446.2 million (44.62 crore) in surcharge in 2011-12 fiscal.

Since then, the number of people paying surcharge and revenue collection has increased. And the number of payment taxpayers paying surcharge exceeded 10,000 in the next five years.

There were 10,931 people with net worth of Tk 22.5 million (2.25 crore) or more in 2015-15 fiscal. The limit was Tk 22.5 million at that time. The NRB received Tk 2.54 billion (254 crore) in that fiscal.

After four years, there are now about 15,000 people owing Tk 30 million (3 crore) or more in 2019-20 and revenue collection crossed Tk 5.25 billion (525 crore).

There are about 9,000 people owing Tk 30 million (3 crore) or more living in Dhaka and its surrounding areas, which is more than half of the total number. There are 6.2 million (62 lakh) tax identification number (TIN) holders and only 0.25 per cent of them pay surcharge.

A survey was conducted on the landlords five years ago. According to the survey, about 150,000 landlords from Dhaka and Chatttogram neither had TIN nor paid tax. A house including land is worth over 10 million (1 crore) in Dhaka and Chattogram but many wealthy persons dodge surcharge due to manipulations in showing the property value in tax documents.

This report appeared in the print and online edition of Prothom Alo and has been rewritten in English by Hasanul Banna