NBR hikes tax rates by five times

Express (July)

The National Board of Revenue (NBR) has raised the tax rates from 200 per cent to 1000 per cent on investment of black money for the purchase of commercially-run vehicles in the current fiscal year.

People can invest their undisclosed money on commercially-run vehicles by paying a tax amount equivalent to 10 times of the existing payable presumptive tax on similar vehicles, officials said.

Taxmen will not raise any question on the invested amount in commercially-run vehicles if anybody pays such an amount of tax.

Currently, owners of commercial vehicles, including air-conditioned bus, minibus, coaster and taxicab, pay presumptive taxes ranging from Tk 20,000 to Tk 7,000.

Presumptive taxes for commercially-run vehicles above 10 years starts from Tk 3000 to Tk 10,000.

The revenue board issued a Statutory Regulatory Order (SRO) early this month by increasing the tax rates for investment of commercial vehicles without being questioned.

Officials said the opportunity for investment of black or undisclosed money on commercial vehicle businesses was enforced in 1999.

Talking to the FE, a senior tax official said the government kept the provision during the last one decade in a bid to bring the undisclosed income into formal channel.

"Taxmen found the sector is still lagging behind due to lack of adequate investment. The opportunity for investment of undisclosed money has been offered to address the grey area of our economy," the official said.

The revenue board earned an insignificant amount of tax in the last few years despite the existing opportunity, he said without disclosing the amount of received tax.

"We don't have the complete data on how much tax was collected despite the opportunity offered in the last one decade," he added.

A large number of luxury buses are now plying the roads, especially in Dhaka-Chittagong routes, like Saudia-S.Alam, Green Line, Silk Line, Shohag Poribohan etc.

In 2009, the government hiked taxes up to 100 per cent on all types of commercial vehicles as they found evasion is rampant, amid loud outcry from the transport owners.

Taxes on luxury buses doubled to Tk 10,000 a year, minibus and coaster to Tk 4,000 from Tk 2700 and five-tonne truck to Tk 5000 from Tk 4000.

All modes of commercial vehicles saw the hike, since 2000, including 52-seater buses, cargo and container carriers, taxicabs, human haulers, pick-ups, tank lorries, maxies and small lorries.

Tax officials said although the transport sector witnessed a boom in the last few years, its contribution to national exchequer was only Tk 2.0 billion until 2009.

According to the Bangladesh Road and Transport Authority (BRTA) statistics 1.1 million motor vehicles are plying the country's roads. But the owners said only a few bothers to pay taxes regularly.

Khandaker Rafiqul Hossain Kajol, president of Bangladesh Association of Bus Companies, said: "We pay the presumptive tax. But tax officials often decline to accept the amount."

He said the tax officials can explain the matter better than the owners of bus companies.