Tax(Case Report-on-Income-Tax-Authorities-in-Bangladesh)

ASSIGNMENT on Income task Authorities in Bangladesh pic bailiwick notice of revenue NBR Rajashwa Bhaban Segunbagicha, Dhaka recollect +88 02 933-3444. http//www. nbr-bd. org National poster of gross (NBR), Bangladesh. rapscallion 2 of 31 Table of contents Serial Topic summon No. I overcome . 01 varlet.. . II Topic/Source of the ASSIGNMENT.. 02 III Table of 03 contents 01 Letter of 04 Transmittal.. 02 cite 05 03 Background of 06 NBR.. 04 levyation and its 07 history 05 measure Authorities of Bangladesh .. 10 06 Types of Income 12 07 Classification of task dodges.. 13 08 Types of 14 measure income.. 09 Methodology . 15 9. 01 Sources of Income 15 9. 02 Tax stride 16 9. 03 Tax Rebate for investiture . 16 9. 04 Who should submit Income Tax Return? 17 9. 05 Time to submit Income Tax Return 18 9. 06 Assessment Procedure .. 19 9. 07 Tax withholding functions .. 19 9. 08 Major atomic number 18as for final settlement of r evenue enhancement liability . 22 9. 09 Fiscal incentives .. 23 9. 10 Avoidance of Double Taxation Agreement . 24 10 Steps for collecting Income Tax in Bangladesh.. 24 11 Procedure of Assessment . 25 12 Problems for collecting Income Tax.. 26 13 Conclusion.. 31 .. National wit of Revenue (NBR), Bangladesh.Page 3 of 31 Letter of Transmittal March 03, 2012 To Md. Abdul Awal Chairman, EECS deparment NorthSouth University Basundhara Campus, Dhaka. Subject Submission of appointee on Income Tax Authorities in Bangladesh. Dear Sir I am pleased to submit this Assignment-report on Income Tax Authorities in Bangladesh. This research course of instruction was taken by the help of Three assess arrangement of Bangladesh, written by M. A. Akkas, and Income Tax written by Mr. Mahmud and Purohit Bhattacharjee. Here is the report on the empirical study of Income Tax authority in Bangladesh.We honestly believe that this report will fulfill the requirements of the human face report , which will help us a freshet to gain sufficient knowledge about the Income Tax authority in Bangladesh Sincerely, Deb kumar Roy ID0910019040 National Board of Revenue (NBR), Bangladesh. Page 4 of 31 Acknowledgement I am very much grateful to the God first, who has given me all the ability to perform this chore. At net but non the least, I am grateful to my ever-respected p atomic number 18nts those who always give us mental support and well wishes.National Board of Revenue (NBR), Bangladesh. Page 5 of 31 Background of NBR The National Board of Revenue (NBR) is the central authority for evaluate administration inBangladesh. ItwasestablishedbyPresidentsOrderNo. 76of1972. Administratively, it is under the Internal Resources Division (IRD) of the Ministry of finance (MoF). MoF has 3 Divisions, headed by 3 permanent Secretaries to the brass, namely, the Finance Division the Internal Resources Division (IRD) and the Economic Relations Division (ERD). The depositary, IRD is the ex- officio Chairman of NBR.NBR is responsible for formulation and continuous re-appraisal of revenue-policies and impose-laws, negotiating valuate treaties with descented governments and participating in inter-ministerial deliberations on economic issues having a bearing on fiscal policies and revenue administration. The principal(prenominal) responsibility of NBR is to collect domestic revenue (primarily, Import Duties and Taxes, bath and Income Tax) for the government. new(prenominal) responsibilities overwhelm administration of all matters related to impose revenuees, duties and otherwise evaluate producing fees.Under the overall control of IRD, NBR administers the Excise, value-added tax, Customs and Income-Tax services consisting of 3434 officers of various grades and 10195 supporting staff positions (Approved set up as on 09 Feb. , 2000 AD). Negotiating tax treaties with foreign governments and participating in inter- ministerial deliberations on economic issues ha ving a bearing on fiscal policies and tax administration are also NBRs responsibilities. The main responsibility of NBR is to mobilize domestic resources through appealingness of import duties and taxes, VAT and income tax for the government.Side by side with collection of taxes, facilitation of international sight through quick clearance of import and export cargoes has also emerged as a key role of NBR. Other responsibilities include administration of matters related to taxes, duties and other revenue related fees/charges and hinderion of smuggling. Under the overall control of IRD, NBR administers the excise, VAT, customs and income-tax services consisting of 3434 officers of various grades and 10195 supporting staff positions. National Board of Revenue (NBR), Bangladesh. Page 6 of 31Taxation and its history Taxation- one of the major sources of public revenue to meet a countrys revenue and cultivation expenditures with a view to accomplishing both(prenominal) economic an d socialobjectives,suchasredistributionofincome,pricestabilizationand reject harmful wasting disease. It supplements other sources of public finance such as issuance of currency notes and coins, charging for public goods and services and borrowings. The term Tax has been derived from the French word Taxe and etymologically, the Latin word Taxare is related to the term tax, which room to charge.Tax is a contribution exacted by the state. It is a non-penal but compulsory and unrequited modify of resources from the private to the public sector, levied found on predetermined criteria. agree to Article 152(1) of the Constitution of Bangladesh, taxation includes the imposition of every tax, rate, duty or impost, whether general, local or special, and tax shall be construed accordingly. Rate is a local tax compel by local government on its residents or the stead owners of the locality, a duty is a tax levied on a commodity, and an impost is a tax imposed for an entry into a countr y.Under the provision of article 83 of the Constitution, no tax shall be levied or tranquil except by or under the authority of an Act of Parliament. Bangladesh inherited a system of taxation from its preceding(a) British and Pakistani rulers. The system, however, true based on generally accepted adviseons and there had been efforts towards rationalizing the tax administration for optimizing revenue collection, reducing tax leak and preventing revenue leakage through system loss.Taxes include narcotics duty (collected by the Department of Narcotics Control, Ministry of Home Affairs), land revenue (administered by the Ministry of Land and collected at local Tahsil offices numbered on average, one in every two Union Parishads), non-judicial stamp (collected under the Ministry of Finance), registration fee (collected by the Registration Directorate of the Ministry of Law, Justice and Parliamentary Affairs) and motor vehicle tax (collected under the Ministry of Communication). Nati onal Board of Revenue (NBR), Bangladesh.Page 7 of 31 The tax structure in the country consists of both direct (income tax, gift tax, land development tax, non-judicial stamp, registration, immovable property tax, etc) and indirect (customs duty, excise duty, motor vehicle tax, narcotics and liquor duty, VAT, SD, foreign travel tax, TT, electricity duty, advertisement tax, etc) taxes. The present land revenue system of Bangladesh has its base in the East Bengal state acquisition and tenancy act 1950 which established a direct contract between the taxpayer and the government.The most important tax on the value of transferred property is the non-judicial stamp tax (levied under the Stamp Act 1899), which has been in existence since January 1899. Cur adopt rates of non-judicial stamp duty are provided in the First Schedule of the Finance Act 1998, ranging from Tk. 4 to Tk. 10,000 in case of absolute rate, or from 0. 07% to 1. 5% of the value of consideration in case of ad valorem rate. The judicial stamp tax is being levied under the Court Fees Act 1870, although the levy of court fees originated in the introduction of the Bengal Regulation No. 8 of 1795. The first sales tax was introduced in the former Central Provinces of India in 1938. In Bengal, sales tax was adopted in 1941. In 1948, sales tax was transferred as a central tax under the General Sales Tax Act of 1948. The Sales Tax Act 1951 came into force on 1 July 1951 by repealing the Pakistan General Sales Tax Act of 1948. Until 1982, sales tax was being collected under the 1951 Act, which was replaced by the Sales Tax Ordinance 1982. The VAT law was promulgated by repealing the Business.Income tax was first introduced in the subcontinent by the British in 1860 to make up the revenue deficit caused by the sepoy revolt, 1857. afterward independence of Bangladesh, income tax was make effective under the Income Tax Act 1922 passed on the basis of the recommendations of the All-India Income Tax Committee appoi nted in 1921. Currently, income tax has been imposed under the Income Tax Ordinance 1984 (ITO) promulgated on the basis of recommendations of the Final Report of the Taxation Enquiry Commission submitted in April 1979.Income taxpayers (assesses) are classified as individuals, partnership firms, Hindu undivided National Board of Revenue (NBR), Bangladesh. Page 8of 31 families (HUF), associations of persons (AOP), companies (publicly traded and private), local authorities, and other artificial juridical persons. Tax rates and cooking stove of taxable income differ based on residential status of an assesses (resident or non- resident). From fiscal or assessment socio-economic class, (AY) 2000-01, there is a filing threshold of yearly core income of Tk. 00,000 applicable for individuals (including non-resident Bangladeshis), partnership firms, HUF, AOP and assesses other than companies and local authorities. In case an identity of this group has a total annual income less than this l evel, he is not required to submit tax return but if someones income is higher, he is to pay a minimum tax of Tk. 1,000. Bangladesh inherited a system of taxation from its past British and Pakistani rulers. National Board of Revenue (NBR), Bangladesh. Page 9 of 31 Tax Authorities of Bangladesh ? there are 3-divisions under the Ministry of Finance (MOF) and Secretary leads each division. ? The Chairman of NBR (National Board of Revenue) is working under Internal Resource Division (IRD). ? NBR is the apex body of the Tax Administration. It consists of two parts (1) Customs & VAT (2) Income Tax. Both are under the alike authority.thither are 4-members under NBR. ? Under the NBR, a Commissioner of Taxes is the head of the department and he is in charge of a taxes Zone. There are 8-Zones in Bangladesh. National Board of Revenue (NBR), Bangladesh. Page 10 of 31 pic National Board of Revenue (NBR), Bangladesh. Page 11 of 31 Types of Income Income non clear IncomeNon-Asse ssable Income Taxable Income Non-taxable Income Income Income means anything received in cash or in kind unless exempted by laws. 1) Assessable Income Assessable Incomes are those incomes, which are include in the determination of total income of a taxpayer. ) Taxable Income Taxable Incomes are those incomes that the tax is to be paid on those incomes. b) Non- Taxable Income Non taxable income is taken into total income for taxation rate purpose but no tax is to be paid on this part of income. 2) Non- Assessable Income Non- assessable incomes are those incomes which are not included in the determination of total income of a taxpayer. National Board of Revenue (NBR), Bangladesh. Page 12 of 31 Classification of Tax systems Classification of Tax organisation Single Tax Multiple Taxes 1. Single Tax Only one tax for everybody.Single tax is the poll tax or the head tax or adolescent tax, which is imposed on a person simply because he is there in the federation. 2. Multiple TaxesA syst em under which different types of taxes shall be levied by the govt. according to suitability. Ex. Income Tax, VAT. National Board of Revenue (NBR), Bangladesh. Page 13 of 31 Types of Taxation Types of Taxation a) Direct Tax b) Indirect Tax a) forward Tax b) Regressive Tax c) Proportional Tax a) Direct Tax Direct tax is a sort of tax the impact of effect incidents and which get back on the person on whom it is imposed. . e. Income Tax, Marriage Tax etc. b) Indirect Tax Indirect taxes are those burden of which can be passed on others through price vehicles. c) Progressive Tax The tax rate increases as the taxable income/amount increases. d) Regressive tax The opposite of a progressive tax is a regressive tax where the tax rate decreases as the taxable income/amount increases. e) Proportional Tax In between is a proportional tax, where tax is fixed as the amount to which the rate is applied increases. National Board of Revenue (NBR), Bangladesh. Page 14 of 31 MethodologyAmong direc t taxes, income tax is one of the main sources of revenue. It is a progressive tax system. Income tax is imposed on the basis of ability to pay. The much a taxpayer earns the more he should pay- is the basic article of faith of charging income tax. It aims at ensuring equity and social justice. Sources of Income For the purpose of computation of total income and charging tax thereon, sources of income can be classified into 7 categories, which are as follows Salaries Interest on securities Income from house property Income from agriculture Income from business or profession Capital gains Income from other sources. Tax Rate (Assessment Year- 2008-09) Other than Company For individuals other than female taxpayers, ranking(prenominal) taxpayers of 70 years and to a higher place and retarded taxpayers, tax payable for the First 1,65,000/- Nil Next 2,75,000/- 10% Next 3,25,000/- 15% Next 3,75,000/- 20% eternal sleep Amount 25% For female taxpayers, senior taxpayers of age 70 ye ars and in a higher place and retarded taxpayers, tax payable for the First 1,80,000/- Nil Next 2,75,000/- 10% Next 3,25,000/- 15% National Board of Revenue (NBR), Bangladesh. Page 15 of 31 Next 3,75,000/- 20% Rest Amount 25% Minimum tax for any individual assesses is Tk. 2,000 Non-resident Individual25% (other than non-resident Bangladeshi) For Companies Publicly Traded Company27. 5% Non-publicly Traded Company37. 5% Bank, redress & Financial Company 45% Mobile Phone Operator Company45% If any publicly traded phoner declares more than 20% dividend, 10% rebate on total tax is allowed. Tax Rebate for investment Rate of Rebate Amount of allowable investment is either up to 25% of total income or Tk. 5,00,000/- whichever is less.Tax rebate amounts to 10% of allowable investment. Types of investment qualified for the tax rebate are Life insurance premium voice to deferred annuity Contribution to Provident Fund to which Provident Fund Act, 1925 applies self-importance contribut ion and employers contribution to Recognized Provident Fund Contribution to Super Annuation Fund Investment in approved debenture or debenture stock, Stocks or Shares Contribution to deposit pension scheme Contribution to merciful Fund and Group restitution premium Contribution to Zakat Fund Donation to charitable hospital approved by National Board of Revenue Donationtophilanthropicoreducationalinstitutionapprovedbythe Government Donation to socioeconomic or cultural development institution established in Bangladesh by Aga Khan Development Network National Board of Revenue (NBR), Bangladesh. Page 16 of 31 Who should submit Income Tax Return? If total income of any individual other than female taxpayers, senior taxpayers of 70 years and above and retarded taxpayers during the income year exceeds Tk 1,65,000/-. If total income of any female taxpayer, senior taxpayer of 70 years and above and retarded taxpayer during the income year exceeds Tk 1,80,000/-. If any person was assessed for tax during any of the 3 years immediately preceding the income year. A person who lives in any city corporation/paurashava/divisional HQ/district HQ and owns a building of more than one storey and having plinth area exceeding 1,600 sq. feet/owns motor car/owns membership of a club registered under VAT Law. If any person subscribes a telephone. If any person runs a business or profession having trade license. Any professional registered as doctor, lawyer, income tax practitioner, Chartered Accountant, comprise & Management Accountant, Engineer, Architect and Surveyor etc. Member of a Chamber of Commerce and Industries or a trade Association. Any person who participates in a tender. A person who has a Taxpayers Identification Number (TIN). Candidate for Union Parishad, Paurashava, City Corporation or Parliament. Time to Submit Income Tax Return For CompanyBy fifteenth mean solar day of July next following the income year or, where the fifteenth day of July falls before the expir y of six months from the end of the income year, before the expiry of such six months. For Other than Company Unless the date is extended, by the Thirtieth day of September next following the income year. Consequences of Non-Submission of Return imposition of penalty amounting to 10% of tax on last assessed income subject to a minimum of Tk. 1,000/- In case of a continuing default a further penalty of Tk. 50/- for every day of delay.National Board of Revenue (NBR), Bangladesh. Page 17 of 31 Assessment Procedures For a return submitted under normal scheme, assessment is made after hearing. For returns submitted under Universal Self Assessment Scheme, the acknowledgement slip is determined to be an assessment order. Universal Self Assessment is of course subject to audit. Appeal against the order of DCT A taxpayer can file an appeal against DCTs order to the Commissioner (Appeals)/Additional or articulate Commissioner of Taxes (Appeals) and to the Taxes Appellate Tribunal against an Appeal order. Tax withholding functionsIn Bangladesh withholding taxes are ordinarily termed as Tax deduction and collected at source. Under this system both private and public limited companies or any other system of rules specified by law are legally authorized and bound to withhold taxes at some point of making payment and deposit the same to the Government Exchequer. The taxpayer receives a certificate from the withholding authority and gets credits of tax against assessed tax on the basis of such certificate. Heads of Income Subject to deduction or collection of income tax at source with specified rates of deduction. No. Heads sectionalization/Rule Rate Chalan in the name of 1 Salaries Respective voice 50 deduction at average rate Zone 2 Discount on the real value of deduction at normal rate or maximum rate LTU Bangladesh Bank Bills parting 50A whichever is greater. 3 Interest on securities Section 51 10%on interest or discount LTU 4 Supply of goods and ex ecution of nil up to 1 lac, 1-5 lacs Zone-2 (Partly) & contracts and sub-contracts Section (1%), 5-15 lacs (2. 5%), 15- LTU 52(Rule 16) 25 lacs 3. 5% and 25 lacs and above (4%) National Board of Revenue (NBR), Bangladesh. Page 18 of 31 5 Indenting commission / Shipping 3. 5% of the total receipt of indenting Zone-2 dash commission Section 52 (Rule 17) commission & 5% of total Shipping self-assurance commission receipt 6 Royalty, Fees for professional or Zone-8 technical services Section 52 A 10% of the fees 7 Stevedoring agency & Security Section 52 Ctg. Zone- service AA 7. 5% of the fees 2 8 C & F agency commission Section 52 Zone-2 AAA 7. 5% of the fees 9 Sale of bandrolls ( for biri) Respective Section 52B 6% of the value of bandrolls. Zone 10 Compensation for acquisition of 6% of the compensation money Zone-2 property Section 52C 11 Interest on saving instruments 10% of the amount of interest (Current Zone-2 Section 52D rat e) 12 Collection of tax from brick 1 Sec. = Tk. 10,000/ for each brick field. Respective manufacturers 1. 5 Sec. = Tk. 2,000/ for each brick Zone field. Section 52F 2 Sec. = Tk. 18,000/ for each brick field. 13 Commission on Letter of 5% of the amount of commission. LTU Credits Section 52I 14 payoff & Renewal of trade Tk 500/- For renewal of each Zone-3 licence Section 52K Lincence 15 Trustee fees Section 52L 10% 16 Frieght Forward agency Com. Section 52M 7. 5% 17 takeal power Section 52N 4% 18 Import of goods Section 53 (Rule17A) Zone-2 3% of the value of imports. 19 Income from house property (house No deduction if monthly rent is below Zone-2 rent) 20,000/- Dha & Other Section 53A (Rule17B)3% (if monthly rent is outside 20,000-40,000 Tk. ) and Zone 5% (if monthly rent is above 40,000 Tk. 20 Shipping business of resident Zone-2,ctg Section 53AA 5% of freight 21 Export of manpower Section 53B (Rule Zo ne-2, dhk & ctg 17C) 10% of the service charges. 22 Export of Knitwear Section 53BB 0. 25% Zone-5 23 Member of Stock Section Zone-7 Exchange 53BBB 0. 015% 24 Export of goods except Section 0. 25% Zone-5 National Board of Revenue (NBR), Bangladesh. Page 19 of 31 Knitweare & Woven garments 53BBBB 25 Sale of goods by public auction Section 53C (Rule Zone-2 17D) 5% of the sale price 26 Courier Service (Non- resident) Zone-6 Section 53CC 7. 5% 27 defrayment to film actors and actresses 5% of the amount paid exceeding Zone-2 Section 53D (Rule Tk. 6000/- 17E) 28 Cash aid Section 53DD 5% Zone-5 29 Commission Fees or discount paid to Zone-2 & LTU distributors Section 53E (Rule 7. 5% of the amount of commission. 17G) 30 Commission or charges paid to the Dhk. Zone- agents of foreign buyers 6, Ctg.Zone-3 and 4 % on the amount of commission or charges. Zone of Section 53EE Respective Division 31 Interest on bank deposits Section 53F (Rule 10% of the amount of interest. Zone-1 17H) 32 Real Estate & Developers In case of Bldg. 250 per sq. eter Zone-5 In case of land 5% of deed value Section 53FF 33 Insurance commission 3% on the amount of commission LTU Section 53G 34 Commission paid to the Surveyors of Dhk. Zone- General Insurances 2, Ctg. Zone-3 and 7. 5% on the amount of commission. Zone Section 53GG of Respective Division 35 Transfer of property Section 53H (Rule 5% of the value of the property. Survey 17I) Zone Interest on Post Office No deduction if the amount of interest doesZone-2 Savings Bank Account not exceeds Tk. 1,50,000 and if exceeds Section 53I then 10% on the amount of interest . 36 Rent of vacant land, plant and No deduction if monthly rent is below Zone-2 machinery 15,000/- Section 53J (Rule 3% (if monthly rent is 17BB) 15,000 -30,000 Tk. ) and 5% (if monthly rent is above 30,000 Tk. ) Nat ional Board of Revenue (NBR), Bangladesh. Page 20 of 31 37 Advertising bill of news paper, Zone-5 magazine, private television 3% of the value of the property. impart Section 53K 38 Dividend LTU (only LTUs (1) Resident individual 10%, non-resident files) all others Section 54 individual 25% (2) Company 15% Zone-2 39 Income from draft Section 55 20% of the amount won. Zone-2 40 Income of non-resident Other than Company rate applicable to the com. OtherZone-6 non- resident Bangladeshi Section 56 than social club maximum rate. Major areas for final settlement of tax liabilityTax deducted at source for the following cases is treated as final discharge of tax liabilities. No additional tax is charged or refund is allowed in the following cases- Supply or contract work Band rolls of hand made cigarettes Import of goods Transfer of properties Export of manpower Real Estate Business Export value of garments Local shipping business Royalty, technical know-how fe e Insurance agent commission. Auction purchase Payment on account of survey by surveyor of a general insurance company Clearing & forwarding agency commission. Transaction by a member of a Stock Exchange. Courier business Export cash subsidy Tax Recovery SystemIn case of non-payment of income tax demand the following measures can be taken against a taxpayer for realization of tax- Imposition of penalty Attachment of bank accounts, hire or any other payment. Filing of Certificate case to the Special Magistrate. National Board of Revenue (NBR), Bangladesh. Page 21 of 31 Advance Payment of Tax Every taxpayer is required to pay plead tax in four equal installments falling on 15th September 15th declination 15th March and 15th June of each year if the latest assessed income exceeds Taka three lakh. Penalty is imposed for default in payment of any installment of advance tax. Fiscal incentives Following are fiscal incentives available to a taxpayer )Tax holiday Tax holiday is allowed f or industrial undertaking, tourist industry and physical infrastructure quick-wittedness established between 1st July 2008 to 30th June 2011 in fulfillment of certain conditions. Industrial Undertaking Eligible for Tax holiday (i)An industry engaged in production of textile, textile machinery, jute goods, high value garments, pharmaceuticals, melamine, plastic products, ceramics, sanitary ware, steel from iron ore, MS Rod, CI Sheet, fertilizer, insecticide & pesticide, computer hardware, petro-chemicals, agriculture machinery, boilers, compressors, basic blunt materials of drugs, chemicals and pharmaceuticals. (ii)An industry engaged in agro-processing, ship building, diamond cutting. Physical Infrastructure Eligible for Tax holidaySea or river port, container ends, internal container depot, container freight station, LNG terminal and transmission line, CNG terminal and transmission line, gas pipe line, flyover, mono rail, underground rail, telecommunication other than mobile pho ne, large water treatment plant & picture through pipe line, waste treatment plant, solar energy plant, export processing zone. Tourism Industry Eligible for Tax holiday Residential hotel having quickness of three star or more. b)Accelerated depreciation Accelerated depreciation on cost of machinery is admissible for new industrial undertaking in the first year of commercial production 50%, in the second year 30% and in the third year 20%. )Income derived from any Small and Medium initiative (SME) engaged in production of any goods and having an annual turnover of not more than taka twenty four lakh is exempt from tax. d)Industry set up in EPZ is exempt from tax for a period of 10 years from the date of commencement of commercial production. e)Income from fishery, poultry, cattle breeding, dairy farming, horticulture, floriculture, mushroom cultivation and sericulture are exempt from tax up to 30th June, 2011, subject to investing at least 10% of the exempted income that exceeds one lakh Taka, in government bonds. National Board of Revenue (NBR), Bangladesh. Page 22 of 31 f)Income derived from export of handicrafts is exempted from tax up to 30th June, 2011. )An amount equal to 50% of the income derived from export business is exempted from tax. h)Listed companies are entitled to 10% tax rebate if they declaredividend of 20% or more. i)Income from Information Technology Enabled Services (ITES) business is exempted up to 30th June, 2011. Avoidance of Double Taxation Agreement There are agreements on avoidance of double taxation between Bangladesh and 28 countries which are- (01) United Kingdom of Great Britain and Northern Ireland (02) Singapore (03) Sweden (04) Republic of Korea (05) Canada (06) Pakistan (07) Romania (08) Sri Lanka (09) France (10) Malaysia (11) lacquer (12) India (13) Germany 14) The Netherlands (15) Italy (16) Denmark (17) China (18) Belgium (19) Thailand (20) Poland (21) Philippines (22) Vietnam (23) Turkey (24) Norway (25) USA (26) Ind onesia (27) Switzerland (28) Oman. National Board of Revenue (NBR), Bangladesh. Page 23 of 31 Steps for collecting Income Tax in Bangladesh Submission of income tax returns is generally due by 30th September in case of non-companies and 31st December in case of companies. Assessment is made in some(prenominal) procedures. They are ? Self assessment ? Presumptive assessment ? Spot assessment ? Pre-audit based assessment. However, certain percent of self assessment cases are selected for audit.Assesses can pick appeal if aggrieved by his assessment. There are three primary forums for appeal. They are to the Appellate Commissioner/Additional Commissioner/Joint Commissioner or to the Commission for reviews. The decisions of Appellate Commissioner/Additional Commissioner/Joint Commissioner can be challenged to the next Appellate Court named as Appellate Tribunal. Withholding tax is levy able on a number of items including contractors, imports, transfer of urban land/building, bank de posits etc. National Board of Revenue (NBR), Bangladesh. Page 24 of 31 Procedure of Assessment Generally the followings steps are followed in case of Assessment of theCompany and the Corporation Step-1 Computation of Business Income Step-2 Computation of fundamental Income Step-3 Determination of Total Tax Liabilities Step-4 Determination of Net Tax Liabilities According to Sections 28, 29 and 30 of ITO, 1984 Income from business is to be calculated after considering admissible and inadmissible expenses to this end. Total Income of the Company is to be calculated by adding other income with income from business. Total Tax liabilities are to be determining by applying prescribed tax rate. Net Tax liability is to be ascertained by deducting the following tax rebate from Total Tax liabilities 10% Tax rebate on foreign income Tax rebate on increased production in case of industrial company, if applicable. Tax rebate on export income (at rate applicable) Tax rebate and average rate on t ax free income. National Board of Revenue (NBR), Bangladesh. Page 25 of 31 Problems for collecting Income Tax Tax avoidance is one of the main fusss for collecting Income Tax by the Income Tax Authority in Bangladesh. It is the legal exercise of the tax regime to ones own advantage, in order to reduce the amount of tax that is payable by means that are within the law. By contrast tax evasion is the general term for efforts to not pay taxes by illegal means. The term tax mitigation is a synonym for tax avoidance.Its pilot use was by tax advisors as an alternative to the pejorative term of tax avoidance. Latterly the term has also been used in the tax regulations of some jurisdictions to distinguish tax avoidance foreseen by the lawmakers from tax avoidance which exploits loopholes in the law. Based on these concepts arises the pillars of Tax Protesters as well as Tax immunity Some of those attempting not to pay tax believe that they have uncovered interpretations of the law that show that they are not subject to being taxed these individuals and groups are sometimes called tax protesters. An unsuccessful tax protestor has been attempting openly to evade tax, while a successful one avoids tax.Tax resistance is the declared refusal to pay a tax for painstaking reasons (because the resister does not want to support the government or some of its activities). Tax resistors typically do not take the position that the tax laws are themselves illegal or do not apply to them (as tax protesters do) and they are more concerned with not paying for particular government policies that they oppose. National Board of Revenue (NBR), Bangladesh. Page 26 of 31 Responses to tax avoidance Avoidance also reduces government revenue and brings the tax system into disrepute, so governments need to prevent tax avoidance or keep it within limits. The obvious way to do this is to frame tax rules so that there is no scope for avoidance. In practice, this has not proved achievable nd ha s led to an ongoing battle between governments amending legislation and tax advisors finding new scope for tax avoidance in the amended rules. Tax evasion By contrast, tax evasion is the general term for efforts by individuals, firms, trusts and other entities to evade taxes by illegal means. Tax evasion usually entails taxpayers deliberately misrepresenting or concealing the true state of their affairs to the tax authorities to reduce their tax liability, and includes, in particular, dishonest tax reporting (such as declaring less income, profits or gains than actually earned or overstating deductions). Illegal income and tax evasionWho earn income by illegal means (gambling, theft, drug trafficking etc. ) is required to report unlawful gains as income when filing annual tax returns. Suspected lawbreakers have therefore been charged with tax evasion when there is insufficient evidence to try them for their non-tax related crimes. Other times, tax evasion can be used as a one more n ail in the coffin by prosecutors by stating that if a person earns illegal income, s/he may also be guilty of tax evasion. Those who attempt to report illegal income as coming from a legitimate source could be charged with money laundering. National Board of Revenue (NBR), Bangladesh. Page 27 of 31 Evasion of Value Added Tax (VAT)During the latter half of the twentieth century, Value Added Tax (VAT) has emerged as a modern form of consumption tax through the world. Producers who collect VAT from the consumers may evade tax by under-reporting the amount of sales. Control of evasion Level of evasion depends on a number of factors one of them being fiscal equation. Peoples tendency to evade income tax declines when the return for due payment of taxesisnotobvious. Evasionalsodependsontheefficiencyofthetax administration. Corruption by the tax officials often fabricate control of evasion difficult. Tax administrations resort to various means for plugging in scope of evasion and increasi ng the level of enforcement.Public opinion on tax avoidance Tax avoidance may be considered to be the dodging of ones duties to society, or alternatively the right of every citizen to structure ones affairs in a manner allowed by law, to pay no more tax than what is required. Attitudes vary from approval through neutrality to outright hostility. Attitudes may vary depending on the steps taken in the avoidance scheme, or the perceived unfairness of the tax being avoided. Corruption by tax officials Corrupt tax officials cooperate with the tax payers who depute to evade taxes. When they detect an instance of evasion, they refrain from reporting in return for illegal gratification or bribe.Corruption by tax officials is a serious problem for the tax administration in a huge number of underdeveloped countries. National Board of Revenue (NBR), Bangladesh. Page 28 of 31 The distinction in various jurisdictions of Tax Evasion and Tax Avoidance The use of the terms tax avoidance and tax ev asion can vary depending on the jurisdiction. In general, the term evasion applies to illegal actions and avoidance to actions within the law. The term mitigation is also used in some jurisdictions to further distinguish actions within the veritable purpose of the relevant provision from those actions that are within the letter of the law, but do not achieve its purpose. National Board of Revenue (NBR), Bangladesh. Page 29 of 31 ConclusionThough the rate of tax revenue is to GDP is very negligible, despite the government is trying to maximize its tax revenue through different method. only if the government should also remind the cannon of convenience while collecting tax from assesses. As we are living in a civilized society should come forward to pay taxes to government in order to conduct the administrative, defense and development activities of the country. Otherwise we would not be able to prove ourselves as civilized people. Tax is the most important in the hand of the gover nment to control the economy as well as the inflection. It also helps in tote money to the economy, develop certain source of the economy and control some other activities of the economy.No Government can run its and perform administration whole caboodle without collecting tax as a source of revenue. So, the Government imposes tax over the company and the corporations. On the other hand Government can also intensive to the infant and certain basic industry for protection through its tax policy. National Board of Revenue (NBR), Bangladesh. Page 30 of 31 ? The leftover ? National Board of Revenue (NBR), Bangladesh. Page 31 of 31 pic pic pic pic pic pic pic pic ? pic pic pic pic pic pic pic pic pic pic pic