Download now
There have been some plan discussions regarding the duty law in Bangladesh, although not very effective. The income tax legal guidelines dates to the Income Tax Ordinance 1984, and was promulgated under the military rule. According to the 1984 Ordinance there are several forms of income on which taxes is accessed: salaries, fascination on investments, income from house or perhaps property, gardening income, cash flow from organization or career, capital benefits and income from other options (Income Tax Manual Part-1, 2009).
Numerous efforts were made to strengthen the revenue breaking down and improve the tax framework. In 1991 Bangladesh embarked on a serious tax change through the introduction of the VALUE-ADDED TAX system. At the same time there was an important reduction of import tariffs. Prior to these types of reforms, trade-based taxes dominated the tax structure in Bangladesh with customs duties alone accounting for about one third of tax revenue throughout the first twenty years of the country’s independence.
Pursuing the introduction of VAT 20 years ago, the share of VALUE-ADDED TAX revenue improved substantially to succeed in 29% in 2014, as the share of customs duties declined to 10. 8%. Even though the foundation of the VAT system has been expanded, numerous distortions were also introduced for reasons of political expediency. Because of these complications, the VALUE-ADDED TAX system underperformed considerably in terms of revenue technology compared with its potential. It really is evident a narrow tax-base, widespread faveur and administrative inefficiencies would be the main factors behind the low tax-to-GDP ratio in Bangladesh in comparison to the neighboring countries. This likewise implies that the tax reconstructs of the previous decades would not bring about significant changes in Bangladesh’s tax performance.
In recent years much simplification and rationalization continues to be introduced to reform the taxation system. Duty assessments were made less complicated and an attempt of attracting more taxpayers into the tax net was made. The automation of tax collection was commenced, and complying with the standards and devices introduced by WCO has increased. The practice of praising the taxpayers and realizing their contribution received institutional shape inside the NBR. When it comes to legislative reforms, the new Useful Tax and Supplementary Work Act of 2012 were enacted and you will be effective from July 2016. A draft Direct Taxes Code was posted on the government’s website and methods will be taken to get it approved by Legislative house by next year. You will discover plans for the comprehensive/maximum decrease in the rate of Import and Supplementary Duty in the plan for the 2016-17 financial 12 months, which will sooner or later shift the responsibility of earnings collection to Individual and company Tax along with Useful Tax (VAT).
