38588280 Assignment on Income Tax Authorities in Bangladesh

8/16/2019 38588280 Assignment on Income Tax Authorities in Bangladesh

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ASSIGNMENTon

Income TaxAuthorities in

Bangladesh


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This page is intentionally left blank...


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National Board of Revenue (NBR), Bangladesh. 8a/e of !


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National Board of Revenue– NBR

Rajashwa BhabanSegunbagicha, Dhaka

Telephone: +88 0 !""#"$$$.

http:%%www.nbb'.o&g

http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/


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"a#le of $ontents%

Serial Topic Page No.

I o9er 8a/e000000000000000000000000000000000000000000000000000000000000000000000000000000000000000 0000000000&(

II To-i!;Sour!e of the ASSIGNMENT00000000000000000000000000000000000000000000000000 000000000000000000&*

III Table of !ontents000000000000000000000000000000000000000000000000000000000000000000000000000000 000000000000000000&<

&' =etter of Transmittal00000000000000000000000000000000000000000000000000000000000000000000000000 000000000000000000&7

& A!kno>led/ement &4000000000000000000

&! Ba!k/round of NBR00000000000000000000000000000000000000000000000000000000000000000000000000 000000000000000000&'

& Ta1ation and its history000000000000000000000000000000000000000000000000000000000000000000000 000000000000000000&)

& Ta1 Authorities of Ban/ladesh 00000000000000000 ((

&* Ty-es of In!ome 000 (*

&+ lassifi!ation of Ta1 systems00000000000000000000000000000000000000000000000000000000000 (<

& Ty-es of Ta1ation00000000000000000000000000000000000000000000000000000000000000000000000000000 (7

&- Methodolo/y 0000000000000000000000000000000000000 (4

-.&' Sour!es of In!ome000 (4

-.& Ta1 Rate (4

-.&! Ta1 Rebate for in9estment 0 ('-.& ?ho should submit In!ome Ta1 Return@ 000000000000000000000000000000000 ()

-.& Time to submit In!ome Ta1 Return 000000 ()

-.&* Assessment 8ro!edure 00 (

-.&+ Ta1 >ithholdin/ fun!tions 00 (

-.& Maor areas for final settlement of ta1 liability 0 22

-.&- .is!al in!enti9es 00 2*

-.'& A9oidan!e of %ouble Ta1ation A/reement 0 2<

'& Ste-s for !olle!tin/ In!ome Ta1 in Ban/ladesh00000000000000000000000000000000 27

'' 8ro!edure of Assessment 0000000000 24

' 8roblems for !olle!tin/ In!ome Ta100000000000000000000000000000000000000000000000000 2'

'! on!lusion0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000 *(



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Letter of Transmittal

August 12, 2010

To

Md. Shakhawat Hossain SelimFaculty, School of BusinessAsian ni!e"sity of Bangladesh

#hanmondi $am%us, #haka.

Subject: Su&mission of Assignment on '(ncome Ta) Autho"ities in Bangladesh*.

#ea" Si"

+e a"e %leased to su&mit this Assignment"e%o"t on '(ncome Ta) Autho"ities inBangladesh* fo" %a"ticula" fulfillment of BBA #eg"ee. This "esea"ch %"og"am wastaken &y the hel% of 'Th"ee ta) system of Bangladesh*, w"itten &y M.A. Akkas, and '(ncome Ta)* w"itten &y 'M". Mahmud* and '-u"ohit Bhattacha"ee*. He"e is the"e%o"t on the o&se"!ational study of '(ncome Ta) autho"ity in Bangladesh* you askedus to conduct last month.

+e honestly &elie!e that this "e%o"t will fulfill the "e/ui"ements of the %"oect "e%o"t

fo" BBA, which will hel% us a lot to gain sufficient knowledge a&out the '(ncome Ta)autho"ity in Bangladesh*

+e a%%"eciate ha!ing this assignment. (f you need any assistance in inte"%"eting this"e%o"t o" in im%lementing ou" "ecommendations, %lease feel f"ee to contact [email protected], $ontact o. +8801717012777.

Since"ely on &ehalf of my "ou%,

Shantanu Das 34eade"5(# 200612778

BBA, 29th Batch 3Ma"keting5Asian ni!e"sity of Bangladesh,

#hanmondi $am%us, #haka.



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$knowledgement

+e a"e !e"y much g"ateful to the od fi"st, who has gi!en us all the a&ilities to%e"fo"m this cho"e. e)t, we would like to thank ou" "es%ected Teache" Md.Shakhawat Hossain Selim, Faculty of Business at AB #hanmondi $am%us whoga!e us the chance to su&mit this Assignment :e%o"t ; -"esentation and also coo%e"ated us with all kinds of "ational suggestions, "ehea"sal and guidance.

+e also like to e)%"ess ou" g"atitude to the hono"a&le $am%us $oo"dinato" of AB#hanmondi $am%us, Professor !dv." !bul #alam !$ad without whoseins%i"ation and com%any, this mission was not a&le to &e accom%lished.

At last &ut not the least, we a"e g"ateful to ou" e!e""es%ected %a"ents those whoalways gi!e us mental su%%o"t and well wishes.

National Board of Revenue (NBR), Bangladesh. 8a/e * of !


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Ba!k/round of NBR

The ational Boa"d of :e!enue 3B:5 is the cent"al autho"ity fo" ta) administ"ationin Bangladesh. (t was esta&lished &y -"esident of 1962.Administ"ati!ely, it is unde" the (nte"nal :esou"ces #i!ision 3(:#5 of the Minist"y of Finance 3MoF5. MoF has 8 #i!isions, headed &y 8 %e"manent Sec"eta"ies to theo!e"nment, namely, the Finance #i!ision the (nte"nal :esou"ces #i!ision 3(:#5 andthe ?conomic :elations #i!ision 3?:#5. The Sec"eta"y, (:# is the e)officio $hai"manof B:. B: is "es%onsi&le fo" fo"mulation and continuous "ea%%"aisal of ta)%oliciesand ta)laws, negotiating ta) t"eaties with fo"eign go!e"nments and %a"tici%ating ininte"ministe"ial deli&e"ations on economic issues ha!ing a &ea"ing on fiscal %oliciesand ta) administ"ation.

The main "es%onsi&ility of B: is to collect domestic "e!enue 3%"ima"ily, (m%o"t#uties and Ta)es, @AT and (ncome Ta)5 fo" the go!e"nment. =the" "es%onsi&ilities

include administ"ation of all matte"s "elated to ta)es, duties and othe" ta) %"oducingfees. nde" the o!e"all cont"ol of (:#, B: administe"s the ?)cise, @AT, $ustoms and(ncomeTa) se"!ices consisting of 88 office"s of !a"ious g"ades and 1019su%%o"ting staff %ositions 3A%%"o!ed set u% as on 09 Fe&., 2000 A#5.

egotiating ta) t"eaties with fo"eign go!e"nments and %a"tici%ating in inte"ministe"ial deli&e"ations on economic issues ha!ing a &ea"ing on fiscal %olicies andta) administ"ation a"e also B:


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"a1ation and its history

Ta)ation one of the mao" sou"ces of %u&lic "e!enue to meet a count"y


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The ta) st"uctu"e in the count"y consists of &oth di"ect 3income ta), gift ta), land

de!elo%ment ta), nonudicial stam%, "egist"ation, immo!a&le %"o%e"ty ta), etc5 and

indi"ect 3customs duty, e)cise duty, moto" !ehicle ta), na"cotics and li/uo" duty, @AT,

S#, fo"eign t"a!el ta), TT, elect"icity duty, ad!e"tisement ta), etc5 ta)es.

The %"esent land "e!enue system of Bangladesh has its &ase in the ?ast Bengal state

ac/uisition and tenancy act 190 which esta&lished a di"ect cont"act &etween the

ta)%aye" and the go!e"nment.

The most im%o"tant ta) on the !alue of t"ansfe""ed %"o%e"ty is the nonudicial stam%

ta) 3le!ied unde" the Stam% Act 17995, which has &een in e)istence since anua"y

1799. $u""ent "ates of nonudicial stam% duty a"e %"o!ided in the Fi"st Schedule of

the Finance Act 1997, "anging f"om Tk. to Tk. 10,000 in case of a&solute "ate, o"

f"om 0.06G to 1.G of the !alue of conside"ation in case of ad !alo"em "ate. The

udicial stam% ta) is &eing le!ied unde" the $ou"t Fees Act 1760, although the le!y of

cou"t fees o"iginated in the int"oduction of the Bengal :egulation o. 87 of 169.

The fi"st sales ta) was int"oduced in the fo"me" $ent"al -"o!inces of (ndia in 1987. (n

Bengal, sales ta) was ado%ted in 191. (n 197, sales ta) was t"ansfe""ed as a

cent"al ta) unde" the ene"al Sales Ta) Act of 197. The Sales Ta) Act 191 came

into fo"ce on 1 uly 191 &y "e%ealing the -akistan ene"al Sales Ta) Act of 197.

ntil 1972, sales ta) was &eing collected unde" the 191 Act, which was "e%laced &ythe Sales Ta) ="dinance 1972. The @AT law was %"omulgated &y "e%ealing the

Business.

(ncome ta) was fi"st int"oduced in the su&continent &y the B"itish in 17>0 to make

u% the "e!enue deficit caused &y the se%oy "e!olt, 176. Afte" inde%endence of

Bangladesh, income ta) was made effecti!e unde" the (ncome Ta) Act 1922 %assed

on the &asis of the "ecommendations of the All(ndia (ncome Ta) $ommittee

a%%ointed in 1921. $u""ently, income ta) has &een im%osed unde" the (ncome Ta)

="dinance 197 3(T=5 %"omulgated on the &asis of "ecommendations of the Final

:e%o"t of the Ta)ation ?n/ui"y $ommission su&mitted in A%"il 1969. (ncome

ta)%aye"s 3assesses5 a"e classified as indi!iduals, %a"tne"shi% fi"ms, Hindu undi!ided

National Board of Revenue (NBR), Bangladesh. 8a/e - of !


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families 3HF5, associations of %e"sons 3A=-5, com%anies 3%u&licly t"aded and

%"i!ate5, local autho"ities, and othe" a"tificial u"idical %e"sons. Ta) "ates and sco%e of

ta)a&le income diffe" &ased on "esidential status of an assesses 3"esident o" non

"esident5.

F"om fiscal o" assessment yea", 3A5 200001, the"e is a filing th"eshold of annual

total income of Tk. 100,000 a%%lica&le fo" indi!iduals 3including non"esident

Bangladeshis5, %a"tne"shi% fi"ms, HF, A=- and assesses othe" than com%anies and

local autho"ities. (n case an identity of this g"ou% has a total annual income less than

this le!el, he is not "e/ui"ed to su&mit ta) "etu"n &ut if someone


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"a/ uthorities of Bangladesh

1 The"e a"e 8di!isions unde" the

Minist"y of Finance 3M=F5 and

Sec"eta"y leads each di!ision.

The $hai"man of B: 3ational Boa"d

of :e!enue5 is wo"king unde"

(nte"nal :esou"ce #i!ision 3(:#5.

B: is the a%e) &ody of the Ta)

Administ"ation.

(t consists of two %a"ts

(1) $ustoms ; @AT

(2) (ncome Ta).

Both a"e unde" the same autho"ity.

The"e a"e mem&e"s unde" B:.

1 nde" the B:, a $ommissione"

of Ta)es is the head of the

de%a"tment and he is in cha"ge of a

ta)es Zone. The"e a"e 7Iones in

Bangladesh.

National Board of Revenue (NBR), Bangladesh.

8a/e '' of !


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National Board of Revenue (NBR), Bangladesh. 8a/e ' of !


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"01es of 2n$ome

%ncome

Assessa&le (ncome onAssessa&le

(ncome

Ta)a&le (ncomeonta)a&le (ncome

%ncome: (ncome means anything "ecei!ed in cash o" in kind unless e)em%ted &y

laws.

1) !ssessable %ncome: Assessa&le (ncomes a"e those incomes, which a"e

included in the dete"mination of total income of a ta)%aye".

1) &a'able %ncome: Ta)a&le (ncomes a"e those incomes that the ta) is

to &e %aid on those incomes.2) (on) &a'able %ncome: on J ta)a&le income is taken into total

income fo" ta)ation "ate %u"%ose &ut no ta) is to &e %aid on this %a"t

of income.

2) (on) !ssessable %ncome: on assessa&le incomes a"e those incomes

which a"e not included in the dete"mination of total income of a ta)%aye".

National Board of Revenue (NBR), Bangladesh. 8a/e '! of !


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3lassifi$ation of "a/ s0stems

Classification of Tax

System

Single Tax Multiple Taxes

1. Sin*le &a': =nly one ta) fo" e!e"y&ody. Single ta) is the %oll ta) o" the head

ta) o" adolescent ta), which is im%osed on a %e"son sim%ly &ecause he is

the"e in the society.

2. ulti,le &a'es: A system unde" which diffe"ent ty%es of ta)es shall &e le!ied

&y the go!t. acco"ding to suita&ility. ?). (ncome Ta), @AT.



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"01es of "a/ation

&-,es of &a'ation

a5 -"og"essi!e Ta)a5 #i"ect Ta) &5 :eg"essi!e Ta)&5 (ndi"ect Ta) c5 -"o%o"tional Ta)

1) Direct &a': #i"ect ta) is a so"t of ta) the im%act of effect incidents and which fall

&ack on the %e"son on whom it is im%osed. i.e. (ncome Ta), Ma""iage Ta) etc.

2) %ndirect &a': (ndi"ect ta)es a"e those &u"den of which can &e %assed on othe"s

th"ough %"ice !ehicles.

3) Pro*ressive &a': The ta) "ate inc"eases as the ta)a&le incomeDamount

inc"eases.

4) e*ressive ta': The o%%osite of a %"og"essi!e ta) is a "eg"essi!e ta) whe"e the

ta) "ate dec"eases as the ta)a&le incomeDamount inc"eases.

5) Pro,ortional &a': (n &etween is a %"o%o"tional ta), whe"e ta) is fi)ed as theamount to which the "ate is a%%lied inc"eases.



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Methodolo/y

Among di"ect ta)es, income ta) is one of the main sou"ces of "e!enue. (t is a%"og"essi!e ta) system. (ncome ta) is im%osed on the &asis of a&ility to %ay. Themo"e a ta)%aye" ea"ns the mo"e he should %ay


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e)t 8,6,000D 20G

:est Amount 2G

Minimum ta) fo" any indi!idual assesses is Tk. 2,000

on"esident (ndi!idual 2G3othe" than non"esident Bangladeshi5

3or om,anies

-u&licly T"aded $om%any 26.G

on%u&licly T"aded $om%any 86.G

Bank, (nsu"ance ; Financial $om%any G

Mo&ile -hone =%e"ato" $om%any G

(f any %u&licly t"aded com%any decla"es mo"e than 20G di!idend, 10G "e&ate ontotal ta) is allowed.

&a' ebate for investment:

ate of ebate:

Amount of allowa&le in!estment is eithe" u% to 2G of total income o" Tk.,00,000D whiche!e" is less. Ta) "e&ate amounts to 10G of allowa&le in!estment.

&-,es of investment 4ualified for the ta' rebate are:

4ife insu"ance %"emium

$ont"i&ution to defe""ed annuity$ont"i&ution to -"o!ident Fund to which -"o!ident Fund Act, 192 a%%liesSelf cont"i&ution and em%loye"


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5ho should submit %ncome &a' eturn6

(f total income of any indi!idual othe" than female ta)%aye"s, senio"ta)%aye"s of 60 yea"s and a&o!e and "eta"ded ta)%aye"s du"ing the incomeyea" e)ceeds Tk 1,>,000D.

(f total income of any female ta)%aye", senio" ta)%aye" of 60 yea"s and a&o!eand "eta"ded ta)%aye" du"ing the income yea" e)ceeds Tk 1,70,000D.

(f any %e"son was assessed fo" ta) du"ing any of the 8 yea"s immediately%"eceding the income yea".

A %e"son who li!es in any city co"%o"ationD%au"asha!aDdi!isional HLDdist"ict

HL and owns a &uilding of mo"e than one sto"ey and ha!ing %linth a"eae)ceeding 1,>00 s/. feetDowns moto" ca"Downs mem&e"shi% of a clu&"egiste"ed unde" @AT 4aw.

(f any %e"son su&sc"i&es a tele%hone.

(f any %e"son "uns a &usiness o" %"ofession ha!ing t"ade license.Any %"ofessional "egiste"ed as docto", lawye", income ta) %"actitione",$ha"te"ed Accountant, $ost ; Management Accountant, ?nginee", A"chitectand Su"!eyo" etc.

Mem&e" of a $ham&e" of $omme"ce and (ndust"ies o" a t"ade Association.Any %e"son who %a"tici%ates in a tende".

A %e"son who has a Ta)%aye"


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!ssessment Procedures:

Fo" a "etu"n su&mitted unde" no"mal scheme, assessment is made afte"hea"ing.

Fo" "etu"ns su&mitted unde" ni!e"sal Self Assessment Scheme, the

acknowledgement sli% is dete"mined to &e an assessment o"de". ni!e"salSelf Assessment is of cou"se su&ect to audit.

!,,eal a*ainst the order of D&:A ta)%aye" can file an a%%eal against #$T


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(ndenting commission D 8.G of the total "ecei%t of Ione2

Shi%%ing agencySection 2indenting commission ; Gcommission 3:ule 165 of total Shi%%ing agency

commission "ecei%t

> :oyalty, Fees fo" Ione7

%"ofessional o" technical Section 2 A 10G of the fees

se"!ices

6 Ste!edo"ing agency ;Section 26.G of the fees $tg. IoneSecu"ity se"!ice AA 2

7 $ ; F agencySection 26.G of the fees Ione2commission AAA

9 Sale of &and"olls 3 fo"Section 2B >G of the !alue of &and"olls. :es%ecti!e&i"i5 Ione

10 $om%ensation fo"Section 2$ >G of the com%ensation Ione2ac/uisition of %"o%e"ty money

11 (nte"est on sa!ingSection 2# 10G of the amount of Ione2inst"uments inte"est 3$u""ent "ate5

12 $ollection of ta) f"om 1 Sec. Tk.10,000D fo" each :es%ecti!e&"ick manufactu"e"s &"ick field.Ione

Section 2F1. Sec. Tk.12,000D fo"each &"ick field.

2 Sec. Tk.17,000D fo" each

&"ick field.

18 $ommission on 4ette" of Section 2( G of the amount of 4T$"edits commission.

1 (ssuing ; :enewal ofSection 2K Tk 00D Fo" "enewal of each Ione8t"ade licence 4incence

1 T"ustee fees Section 24 10G

1> F"ieght Fo"wa"d agency Section 2M 6.G

$om.16 :ental %owe" Section 2 G

17 (m%o"t of goods Section 88G of the !alue of im%o"ts. Ione23:ule16A5

19 (ncome f"om house o deduction if monthly "ent Ione2%"o%e"ty 3house "ent5 is &elow 20,000D#ha ;

Section 8A8G 3if monthly "ent is=the"3:ule16B5 20,0000,000 Tk.5 andoutside

G 3if monthly "ent is a&o!e Ione

0,000 Tk.5

20 Shi%%ing &usiness ofSection 8AA G of f"eight Ione2,ctg"esident

21 ?)%o"t of man%owe" Section 8B10G of the se"!ice cha"ges. Ione2,3:ule 16$5 dhk ; ctg

22 ?)%o"t of Knitwea" Section 8BB 0.2G Ione

28 Mem&e" of StockSection0.01G

Ione6

?)change 8BBB

2 ?)%o"t of goods e)ce%t Section 0.2G Ione

National Board of Revenue (NBR), Bangladesh. 8a/e & of !


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Knitwea"e ; +o!en8BBBB

ga"ments

2 Sale of goods &y %u&lic Section 8$G of the sale %"ice Ione2auction 3:ule 16#5

2> $ou"ie" Se"!ice 3onSection 8$$ 6.G Ione>"esident5

26 -ayment to film acto"sSection 8#G of the amount %aid Ione2and act"esses

3:ule 16?5e)ceeding

Tk. 8>000D

27 $ash su&sidy Section 8## G Ione

29 $ommission Fees o"Section 8?6.G of the amount ofIone2 ;

discount %aid to3:ule 165 commission. 4Tdist"i&uto"s

80 $ommission o" cha"ges #hk.Ione%aid to the agents of >,

fo"eign &uye"s G on the amount of $tg.Ione8Section 8?? commission o" cha"ges. and Ione

of :es%ecti!e

#i!ision

81 (nte"est on &ankSection 8F10G of the amount of Ione1

de%osits 3:ule 16H5 inte"est.

82 :eal ?state ; (n case of Bldg. 20 %e" s/. Ione

#e!elo%e"s Section 8FF mete" G of deed(n case of land

!alue

88 (nsu"ance commission Section 8 8G on the amount of4T

commission

8 $ommission %aid to the #hk.Ione

Su"!eyo"s of ene"al 2,(nsu"ances

Section 8

6.G on the amount of $tg.Ione8

commission. and Ioneof

:es%ecti!e

#i!ision

8 T"ansfe" of %"o%e"ty Section 8HG of the !alue of the Su"!ey

3:ule 16(5 %"o%e"ty. Ione

(nte"est on -ost =ffice o deduction if the amount Ione2Sa!ings Bank Account Section 8( of inte"est does not

e)ceeds Tk.1,0,000 and if

e)ceeds then 10G on the

amount of inte"est .8> :ent of !acant land, o deduction if monthly "ent Ione2%lant and machine"y is &elow 1,000D

Section 88G 3if monthly "ent is3:ule 16BB5 1,000 80,000 Tk.5 and

G 3if monthly "ent is a&o!e

80,000 Tk.5



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86 Ad!e"tising &ill of news Ione

%a%e", magaCine,Section 8K 8G of the !alue of the%"i!ate tele!ision %"o%e"ty.

channel

87 #i!idend 315 :esident indi!idual 10G, 4T 3only

Section non"esident indi!idual 2G4TNs files5

325 $om%any 1Gall othe"s

Ione2

89 (ncome f"om lotte"y Section 20G of the amount won. Ione2

0 (ncome of non"esident $om%any "ate a%%lica&le to Ione>

=the" than nonSection > the com. =the" than

"esident BangladeshiO com%any ma)imum "ate.

ajor areas for final settlement of ta' liabilit-:

Ta) deducted at sou"ce fo" the following cases is t"eated as final discha"ge of ta)

lia&ilities. o additional ta) is cha"ged o" "efund is allowed in the following cases

Su%%ly o" cont"act wo"kBand "olls of hand made ciga"ettes(m%o"t of goodsT"ansfe" of %"o%e"ties

?)%o"t of man%owe"

:eal ?state Business

?)%o"t !alue of ga"ments4ocal shi%%ing &usiness:oyalty, technical knowhow fee

(nsu"ance agent commission.Auction %u"chase

-ayment on account of su"!ey &y su"!eyo" of a gene"al insu"ance com%any$lea"ing ; fo"wa"ding agency commission.

T"ansaction &y a mem&e" of a Stock ?)change.$ou"ie" &usiness

?)%o"t cash su&sidy

&a' ecover- S-stem:

(n case of non%ayment of income ta) demand the following measu"es can &e taken

against a ta)%aye" fo" "ealiCation of ta)

(m%osition of %enaltyAttachment of &ank accounts, sala"y o" any othe" %ayment.Filing of $e"tificate case to the S%ecial Magist"ate.



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!dvance Pa-ment of &a':?!e"y ta)%aye" is "e/ui"ed to %ay ad!ance ta) in fou" e/ual installments falling on1th Se%tem&e"P 1th #ecem&e"P 1th Ma"ch and 1th une of each yea" if thelatest assessed income e)ceeds Taka th"ee lakh. -enalty is im%osed fo" default in%ayment of any installment of ad!ance ta).

3iscal incentives :

3olloin* are fiscal incentives available to a ta',a-er:

a5 &a' holida-: Ta) holiday is allowed fo" indust"ial unde"taking, tou"istindust"y and %hysical inf"ast"uctu"e facility esta&lished &etween 1st uly 2007 to80th une 2011 in fulfillment of ce"tain conditions.

%ndustrial nderta;in*


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6) (ncome de"i!ed f"om e)%o"t of handic"afts is e)em%ted f"om ta) u% to 80thune, 2011.

7) An amount e/ual to 0G of the income de"i!ed f"om e)%o"t &usiness ise)em%ted f"om ta).h5 4isted com%anies a"e entitled to 10G ta) "e&ate if they decla"e di!idend of 20G

o" mo"e.i5 (ncome f"om (nfo"mation Technology ?na&led Se"!ices 3(T?S5 &usiness ise)em%ted u% to 80th une, 2011.

!voidance of Double &a'ation !*reement:

The"e a"e ag"eements on a!oidance of dou&le ta)ation &etween Bangladesh and 27count"ies which a"e

3015 nited Kingdom of "eat B"itain and o"the"n ("eland3025 Singa%o"e3085 Sweden305 :e%u&lic of Ko"ea305 $anada30>5 -akistan3065 :omania3075 S"i 4anka

(9) F"ance(10) Malaysia(11) a%an(12) (ndia

(13) e"many(14) The ethe"lands(15) (taly(16) #enma"k(17) $hina(18) Belgium(19) Thailand(20) -oland(21) -hili%%ines(22) @ietnam(23) Tu"key

(24) o"way(25) SA(26) (ndonesia(27) SwitCe"land(28) =man.



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Ste1s for $olle$ting 2n$ome

"a/ in BangladeshSu&mission of income ta) "etu"ns is gene"ally due &y

1► 80th Se%tem&e" in case of noncom%anies and

2► 81st #ecem&e" in case of com%anies.

Assessment is made in se!e"al %"ocedu"es. They a"e

1 Self assessment

2 -"esum%ti!e assessment

3 S%ot assessment

4 -"eaudit &ased assessment.

Howe!e", ce"tain %e"cent of self assessment cases a"e selected fo" audit.

Assesses can %"efe" a%%eal if agg"ie!ed &y his assessment. The"e a"e th"ee %"ima"y

fo"ums fo" a%%eal. They a"e to the A%%ellate $ommissione"DAdditional

$ommissione"Doint $ommissione" o" to the $ommission fo" "e!iews. The decisions

of A%%ellate $ommissione"DAdditional $ommissione"Doint $ommissione" can &e

challenged to the ne)t A%%ellate $ou"t named as A%%ellate T"i&unal.

+ithholding ta) is le!y a&le on a num&e" of items including cont"acto"s, im%o"ts,

t"ansfe" of u"&an landD&uilding, &ank de%osits etc.



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4ro$edure of ssessment

ene"ally the followings ste%s a"e followed in case of Assessment of the $om%anyand the $o"%o"ation

Ste%1 $om%utation of Business (ncome

Ste%2 $om%utation of Total (ncome

Ste%8 #ete"mination of Total Ta) 4ia&ilities

Ste%#ete"mination of et Ta) 4ia&ilities

Acco"ding to Sections 27, 29 and 80 of (T=, 197 (ncome f"om &usiness is to &ecalculated afte" conside"ing admissi&le and inadmissi&le e)%enses to this end.

Total (ncome of the $om%any is to &e calculated &y adding othe" income with incomef"om &usiness.

Total Ta) lia&ilities a"e to &e dete"mining &y a%%lying %"esc"i&ed ta) "ate.

et Ta) lia&ility is to &e asce"tained &y deducting the following ta) "e&ate f"om TotalTa) lia&ilities

10G Ta) "e&ate on fo"eign incomeTa) "e&ate on inc"eased %"oduction in case of indust"ial com%any, if a%%lica&le.

Ta) "e&ate on e)%o"t income 3at "ate a%%lica&le5

5Ta) "e&ate and a!e"age "ate on ta) f"ee income.

National Board of Revenue (NBR), Bangladesh. 8a/e * of !


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4ro#lems for $olle$ting

2n$ome "a/Ta) a!oidance is one of the main %"o&lems fo" collecting (ncome Ta) &y the (ncome

Ta) Autho"ity in Bangladesh. (t is the legal utiliCation of the ta) "egime to one


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Responses to tax avoidance:

A!oidance also "educes go!e"nment "e!enue and &"ings the ta) system into

dis"e%ute, so go!e"nments need to %"e!ent ta) a!oidance o" kee% it within limits.

The o&!ious way to do this is to f"ame ta) "ules so that the"e is no sco%e fo"

a!oidance. (n %"actice, this has not %"o!ed achie!a&le and has led to an ongoing

&attle &etween go!e"nments amending legislation and ta) ad!iso"s< finding new

sco%e fo" ta) a!oidance in the amended "ules.

Tax evasion:

By cont"ast, ta) e!asion is the gene"al te"m fo" effo"ts &y indi!iduals, fi"ms, t"usts

and othe" entities to e!ade ta)es &y illegal means. Ta) e!asion usually entails

ta)%aye"s deli&e"ately mis"e%"esenting o" concealing the t"ue state of thei" affai"s to

the ta) autho"ities to "educe thei" ta) lia&ility, and includes, in %a"ticula", dishonest

ta) "e%o"ting 3such as decla"ing less income, %"ofits o" gains than actually ea"nedP o"

o!e"stating deductions5.

Illegal income and tax evasion:+ho ea"n income &y illegal means 3gam&ling, theft, d"ug t"afficking etc.5 is "e/ui"ed

to "e%o"t unlawful gains as income when filing annual ta) "etu"ns. Sus%ected

law&"eake"s ha!e the"efo"e &een cha"ged with ta) e!asion when the"e is insufficient

e!idence to t"y them fo" thei" nonta) "elated c"imes. =the" times, ta) e!asion can

&e used as a Eone mo"e nail in the coffinE &y %"osecuto"s &y stating that if a %e"son

ea"ns illegal income, sDhe may also &e guilty of ta) e!asion. Those who attem%t to

"e%o"t illegal income as coming f"om a legitimate sou"ce could &e cha"ged with

money laundering.



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vasion of !al"e #dded Tax $!#T%:

#u"ing the latte" half of the twentieth centu"y, @alue Added Ta) 3@AT5 has eme"ged

as a mode"n fo"m of consum%tion ta) th"ough the wo"ld. -"oduce"s who collect @AT

f"om the consume"s may e!ade ta) &y unde""e%o"ting the amount of sales.

&ontrol of evasion:

4e!el of e!asion de%ends on a num&e" of facto"s one of them &eing fiscal e/uation.

-eo%le


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The distinction in vario"s )"risdictions of Tax vasion and Tax #voidance:

The use of the te"ms ta) a!oidance and ta) e!asion can !a"y de%ending on the

u"isdiction. (n gene"al, the te"m Ee!asionE a%%lies to illegal actions and Ea!oidanceE

to actions within the law. The te"m EmitigationE is also used in some u"isdictions to

fu"the" distinguish actions within the o"iginal %u"%ose of the "ele!ant %"o!ision f"om

those actions that a"e within the lette" of the law, &ut do not achie!e its %u"%ose.

National Board of Revenue (NBR), Bangladesh. 8a/e !& of !


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3on$lusion

Though the "ate of ta) "e!enue is to #- is !e"y negligi&le, des%ite the go!e"nment

is t"ying to ma)imiCe its ta) "e!enue th"ough diffe"ent method. But the go!e"nment

should also "emind the cannon of con!enience while collecting ta) f"om assesses.

As we a"e li!ing in a ci!iliCed society should come fo"wa"d to %ay ta)es to

go!e"nment in o"de" to conduct the administ"ati!e, defense and de!elo%ment

acti!ities of the count"y. =the"wise we would not &e a&le to %"o!e ou"sel!es as

ci!iliCed %eo%le.

Ta) is the most im%o"tant in the hand of the go!e"nment to cont"ol the economy aswell as the inflection. (t also hel%s in %ush money to the economy, de!elo% ce"tain

sou"ce of the economy and cont"ol some othe" acti!ities of the economy. o

o!e"nment can "un itNs and %e"fo"m administ"ation wo"ks without collecting ta) as a

sou"ce of "e!enue. So, the o!e"nment im%oses ta) o!e" the com%any and the

co"%o"ations. =n the othe" hand o!e"nment can also intensi!e to the infant and

ce"tain &asic indust"y fo" %"otection th"ough its ta) %olicy.

National Board of Revenue (NBR), Bangladesh. 8a/e !' of !


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The End


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National Board of Revenue (NBR), Bangladesh. 8a/e ! of !

Documents

38588280 Assignment on Income Tax Authorities in Bangladesh