Staff Correspondent: The National Board of Revenue (NBR) is working to reduce tax evasion along with increasing revenue collection. The Tax Department of NBR has recently formed a committee to prepare clear guidelines for tax exemptions.
The committee will work to provide this benefit only to those individuals and organizations who are eligible to be exempted, keeping in mind that the issue of tax exemption should not remain open. The committee will also review the tariff concessions on imports of locally available industrial raw materials and intermediate goods and plan to reduce exemptions. As a result of this move, individual and corporate taxpayers may lose some benefits of tax exemption in whole or in part. NBR has taken this step to help backward linkage industry by encouraging local industry.
Recently the National Board of Revenue (NBR) released a report on the culture of tax evasion. Where it has emerged, information on 102 sectors currently availing partial or full tax exemption. Out of these 40 sectors are being exempted to individual taxpayers. The rest are partially or fully exempted for companies, industries or investments.
According to the report, the amount of tax exemption in the fiscal year 2020-21 was about Tk 126,000 crores. Which is 3.56 percent of the GDP of the period under discussion. Out of which the amount of institutional tax exemption was Tk 85,313 crores. Besides, the amount of personal tax exemption is Tk 40,498 crores.
Among the personal tax exemptions, taxpayers in the poultry sector have received tax exemptions of Tk 2,985 crore. Besides, capital gain is Tk 985 crore and tax exemption on remittance is Tk 11,287 crore.
Institutional or most corporate tax exemptions include IT or software firms, apparel sector, power and energy, micro finance and economic zones. These industries have collectively received tax exemptions of over Tk 30,000 crore. Tk 1,477 crore in IT, Tk 3,437 crore in clothing sector, Tk 8,380 crore in electricity and energy have been exempted. Apart from this, Tk 15,315 crores in microfinance and Tk 4,611 crores in economic zones have been exempted from tax.
It is recommended to consider the areas of non-operating income separately in granting tax exemption, taking care that the exemption is not excessive. Apart from this, it has been said to analyze the scope and formation process of the trust in case of exemption, to check that the taxpayers of the company cannot misuse the benefits of corporate social responsibility. Besides, the report also suggested checking the possibility of cancellation of orders (statutory regulatory orders) which have expired.
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