Levying USER TAX Finance Minister AMA Muhith has hinted at levying, what he termed, user tax on anyone seeking to avail different services, including water supply, medical help and education. This indication was given by him Sunday last while speaking at a function, organised in observance of the International Customs Day. The proposed tax, according to the minister, is being considered by the authorities concerned to offset the loss of revenue due to declining import tariffs. The fall in import duty revenue has largely been the outcome of efforts to meet the needs under the World Trade Organisations existing multilateral trade arrangements. The finance minister has reasons to be concerned over the state of revenue collections through import duties. For quite sometime the revenue from customs duty segment has just stagnated despite rise in the volume of import. Yet the import tariffs levied by Bangladesh are still high compared to other countries of the South Asian region. Experts tend to consider high tariff rates not supportive of any pro-active move to make domestic industries competitive and efficient. However, despite its go-slow nature of approach to the import-tariff cut under the guidelines provided in the World Trade Organisation (WTO) accord, the government would have to accomplish the task ultimately, leading to further fall in tax revenue generation under the import-duty head. With a view to generating enough revenue to finance its increasing development and administrative expenditures, the government is thus left with no other option but to find out alternative sources of revenue to compensate for the loss of import-based revenue collections. But imposition of user tax-hardly anywhere in the world any tax, named so, is levied and in the USA a tax, called use tax, is imposed to prevent someone from evading sales tax by buying goods in a non-taxing state and shipping them into the state that imposes the sales tax -- as hinted by the finance minister might give rise to resentment among the taxpayers. The people might find the imposition of any new tax, in addition to the already existing value added tax (VAT) on utility services, unacceptable. There is no denying that the government will, as of necessity, have to depend on tax revenues for its budgetary operations. And in the case of shortfall in revenue collections from any of the three recognised sources of tax revenues, it would have to act for recouping the losses. But while doing so, the National Board of Revenue (NBR) could take its earnings to a new height only by effectively plugging the holes in its existing tax administration, instead of imposing fresh taxes on the people. The revenue collections from income tax and VAT could be substantially enhanced if only tax evasion could be reduced to a reasonable level. In fact, the incidence of tax evasion is considered very high in Bangladesh. Moreover, millions having taxable income are still managing to remain beyond the tax net. So, the government needs to examine all other options to make up for its loss of tax revenues due to declining earnings in the form of import duties, prior to taking any final decision on the proposed tax.
Posted on: Fri, 31 Jan 2014 17:02:37 +0000
Trending Topics
Recently Viewed Topics
© 2015