Revenue officials considered as corrupt by 72pc businesspersons

As many as 72 per cent of businesspersons believe that revenue officials are corrupt, while 82 per cent consider the existing tax structure to be unfair. Additionally, 79 per cent of respondents indicated that there is a lack of accountability among tax officials.

According to the survey conducted by the Centre for Policy Dialogue (CPD), the information has come to light.

The survey was based on responses from representatives of 123 companies and its findings were presented on Tuesday at a dialogue titled “Corporate Tax and VAT Reform: A Justice Perspective for NBR”, held at a hotel in Gulshan.

The results were shared by CPD Research Associate, Tamim Ahmed.

The survey further revealed that 65 per cent of businesses distrust the calculation process used to impose duties and taxes. Moreover, 35 per cent of respondents felt that paying such duties and taxes brings no tangible benefits.

Presenting the findings, Tamim Ahmed stated that in 2023 tax exemptions amounted to over Tk 2.26 trillion (226,000 crore), a figure that has been steadily increasing since 2011.

He noted that the government could have collected three times more revenue from the VAT sector in 2023. If VAT exemptions and irregularities were eliminated, an additional Tk 1.88 trillion (188,000 crore) could have been collected that year.

The event was attended by National Board of Revenue (NBR) Chairman, Abdur Rahman Khan, as the chief guest and was moderated by CPD’s Research Director, Khondaker Golam Moazzem.

Special guests included Mohammad Abdul Majid, former NBR Chairman and head of the government’s Revenue Sector Reform Committee and Syed Mushfiqur Rahman, NBR Member for VAT, among others.

NBR Chairman Abdur Rahman Khan stated that until a fully automated system is introduced, VAT audits will remain suspended indefinitely if necessary.

He emphasised that businesses must not feel that audits are conducted merely to harass them.

He further noted that the NBR intends to establish a uniform VAT rate, though resistance often comes from businesses themselves.

Describing the provision for minimum tax rates as a “black law”, the NBR Chairman remarked that such provisions will be abolished in the future. However, doing so immediately would result in a significant shortfall in revenue collection.

Former NBR Chairman Abdul Majid commented that dividing the revenue sector into two distinct divisions, Revenue Policy and Revenue Administration, through reforms could resolve up to 25 per cent of existing problems.

He said, however, that the policy division should not be housed within the Secretariat or inside the NBR building itself. Additionally, full automation could address as much as 45 per cent of challenges in the sector.

NBR Member (VAT) Syed Mushfiqur Rahman stated, “Currently, 65 per cent of our revenue depends on indirect taxation, which is not suitable for a middle-income country. Why must we still impose tariffs to protect industries? The problem is not with VAT rates but with excessive exemptions.”

Former Finance Secretary Siddiqur Rahman Chowdhury participating in the open discussion, remarked that VAT should not fall below 15 per cent.

He also highlighted the need to investigate why many listed companies are still avoiding tax.

Other speakers at the dialogue included Amanur Rahman, representative of the Democratic Budget Movement; Mashiur Rahman, NBR’s first Secretary; Farid Uddin, Member of the Revenue Sector Reform Committee and Mahbub Salekin, President of the Dhaka Income Tax Lawyers’ Association.

Business leaders, entrepreneurs and experts were also in attendance.