NBR move to overhaul taxation regime falters
DOT Desk : The National Board of Revenue (NBR) has initiated a plethora of reform initiatives since the 1990s, but those have produced little results in overhauling the taxation regime, officials and experts say, reports The Financial Express. The revenue board spent roughly Tk 3.0 billion on these reform programmes. One case in point is the modernisation plan under which the revenue board aimed to raise taxation to GDP (gross domestic product) ratio to 13 per cent by 2016.But that goal remains elusive, with the ratio hovering at 10 per cent until fiscal year 2017-18. The reform projects also aimed to stem tax evasion through introducing digitised system while stopping taxpayers’ harassment by limiting physical visits to tax offices.
An FE investigation found most of the reform projects were either not sustained or proved ineffective.
Piecemeal basis projects without proper evaluation, ownership and changes in leadership made the projects unsuccessful.
Except for the online issuance of Taxpayers Identification Number (TIN), other digitisation efforts yielded no positive outcome.
Tax-collecting authorities had to suspend many of the initiatives, including e-payment of tax just after a few months of its grand inauguration.
Former chairman of the NBR Abdul Mazid said the bulk of the money of reform projects was spent on appointing consultants.
Other spending went for the purposes of procuring hardware, software and logistics and training, he said.
“Unfortunately, by end of the project tenure most of the hardware went out of order, software became outdated and logistics turned obsolete,” he said.
Trained officials of the projects were also transferred to other tax zones to deal with other issues, he added.
Executive director of the Policy Research Institute (PRI) of Bangladesh Dr Ahsan H Mansur echoed, saying most of the projects were unsuccessful due to the lack of willingness on the part of insiders at the tax-collecting agency.
The designs were faulty in nature as the projects were taken up without feasibility studies, he added.
The NBR started this project in 2014.
Until October 2018, over a quarter of the project fund was spent, though outcome was below the mark.
The only outcome of the project was the automation of VAT registration.
But it also did not escape criticism from the field-level VAT officials.
The officials argued the online registration process is faulty and is complicated to apply.
The project is by far the largest involving as much as Tk 6.90 billion, with the major portion coming from the World Bank.
The government is supposed to spend Tk 2.40 billion from its own coffers.
The project would continue until 2020 with an objective of digitising the VAT administration.
The government had launched the project to prepare groundwork for the VAT and Supplementary Law-2012, which was scheduled to be implemented from 2017.
The implementation of the law was deferred by two years after opposition from businesspeople.
Dr Mansur said the project has remained underperforming since its inception.
He, however, said there is still scope for making it functional by taking bold steps. He did not elaborate on the steps.
Under the governance project, Bitax was the largest component of income tax wing, which received Tk 510 million funds from the Asian Development Bank (ADB).
The project, which concluded in June 30, 2018, was launched to automate income tax return submission, processing and payment of taxes.
Under the project, the NBR had introduced e-payment of taxes in May 2012, which continued for three years.
Since 2015, the online payment system has remained inactive.
The NBR did not renew the contract of the software company to continue and upgrade the e-payment system for unknown reasons.
Online submission of tax returns was introduced under the project.
But taxpayers found the system to be complex and ineffective without the online payment system.