...“TAX EVASION & AVOIDANCE - A REAL PROBLEM FOR BANGLADESH” INTRODUCTION: Tax evasion and avoidance are both phenomena that are probably as old as taxation itself. Wherever and whenever authorities decide to levy taxes, individuals and firms try to avoid paying them. Though this problem has always been present, it becomes more pressing in the course of globalization as this process extends the range of opportunities to dodge taxation while simultaneously reducing the risk of being detected. Developing and emerging countries like Bangladesh are particularly vulnerable to tax evasion and avoidance activities of individual taxpayers and corporations. While tax revenues in OECD-countries are almost 35 per cent of GDP ,in case of Bangladesh it is only around 10%.This can be considered one of the primary reasons for large differences in the ability to mobilize own resources between developed and developing countries. Tax evasion and tax avoidance is a great problem in our country. In Bangladesh there are many individual taxpayers and corporations who are evading or avoiding tax. As a result government’s developments activities are hampered. So, we should know about the tax evasion and tax avoidance and thereby its preventives measures. For development of a country government needs to create infrastructure and invest in various sectors. For this activities government needs founds and tax revenue is the main source for the purpose. But due to tax evasion and tax avoidance government’s...
Words: 5263 - Pages: 22
...“TAX EVASION & AVOIDANCE - A REAL PROBLEM FOR BANGLADESH” INTRODUCTION: Tax evasion and avoidance are both phenomena that are probably as old as taxation itself. Wherever and whenever authorities decide to levy taxes, individuals and firms try to avoid paying them. Though this problem has always been present, it becomes more pressing in the course of globalization as this process extends the range of opportunities to dodge taxation while simultaneously reducing the risk of being detected. Developing and emerging countries like Bangladesh are particularly vulnerable to tax evasion and avoidance activities of individual taxpayers and corporations. While tax revenues in OECD-countries are almost 35 per cent of GDP ,in case of Bangladesh it is only around 10%.This can be considered one of the primary reasons for large differences in the ability to mobilize own resources between developed and developing countries. Tax evasion and tax avoidance is a great problem in our country. In Bangladesh there are many individual taxpayers and corporations who are evading or avoiding tax. As a result government’s developments activities are hampered. So, we should know about the tax evasion and tax avoidance and thereby its preventives measures. For development of a country government needs to create infrastructure and invest in various sectors. For this activities government needs founds and tax revenue is the main source for the purpose. But due to tax evasion and tax avoidance government’s...
Words: 5264 - Pages: 22
...income tax ordinance, 1984 by the Finance Act 2014 and its impact on the tax culture in Bangladesh” Course Name: Income Tax Law of Bangladesh Submitted To: Jehad Uddin Deputy Commissioner of Taxes, Lecturer, Department of Law and Human Rights Submitted By: Sharmin Akter Registration No: 12111034 Roll No: 034 Date of Submission: 30/08/2014 2014 8/30/2014 “Omission of section 75 (1A) (g) in the income tax ordinance, 1984 by the Finance Act 2014 and its impact on the tax culture in Bangladesh” Course Name: Income Tax Law of Bangladesh Submitted To: Jehad Uddin Deputy Commissioner of Taxes, Lecturer, Department of Law and Human Rights Submitted By: Sharmin Akter Registration No: 12111034 Roll No: 034 Date of Submission: 30/08/2014 2014 8/30/2014 Introduction: Bangladesh is the lowest tax effort country among the developing country. This has important policy Implications that Bangladesh and other countries have low tax effort are not utilizing their full capacity of tax revenue, and therefore has the potential for financing budgetary imbalance through increasing tax revenue. Tax policy is the choice of a government as to what taxes to levy, in what amounts, and on whom. It has both microeconomic and macroeconomic aspects. The government develops Tax policy depending on the situation and economical aspects of the country. Sometimes it goes in the right way, but sometimes it creates some opportunities for Tax evasion...
Words: 476 - Pages: 2
...Direct Taxes In Bangladesh Direct Taxes In Bangladesh Md Syedur Rahman Id:053-218-530 Parvez Akhter Linkon 053-225-530 Id: Act-322 {MBR} Direct Taxes In Bangladesh A tax is a financial charge or other levy imposed on an individual or a legal entity by a state or a functional equivalent of a state. Taxes consist of direct taxes and indirect taxes. “Pecuniary burden laid upon individuals or property to support the government a payment exacted by legislative authority”. Tax is not a voluntary payment or donation but an enforced contribution, exacted pursuant to legislative authority and is any contribution imposed by government whether under the name of VAT, Custom, Excise or other name. Taxation means imposition of a non-penal yet compulsory levy for transfer of resources from private to public sector, imposed by the public representative based onpre-determined criteria and without reference to any specific commitment, in order to accomplish some nation’s economic and social objective. These are dues that we pay for the privileges of membership in an organized civil society. Tax is imposed in the assessment year based on income year. Assessment year: The assessment is a period of 12 months just following the income year means computation of total income and tax payable there on. Income year: Income year is the year when the income is earned. The income tax is administrated Income Tax Ordinance, 1984 and the Income tax Rules, 1984 as well as notification...
Words: 9825 - Pages: 40
...Aspect of VAT in Bangladesh.“ Submitted by: Sadhan Krisna BarmanExam. Roll No: 9823502 Registration No : 1806089 Session: 2010-2011 BBA (Hon’s) Second year Class Roll No : 847 Sherpur Govt. College,Sherpur. Date of Submission : February 02, 2014 Chapter Particulars Page No Letter of Transmittal i Preface ii Abstract iii Acknowledgement iv Chapter: 1 1. Introduction 1 Chapter: 2 2.1 Objectives of the Article 2 2.2 Tax System in Bangladesh 2 2.3 Introduction of VAT in Bangladesh 4 Chapter : 3 3.1 Features of VAT in Bangladesh 7 3.2 Efficiency and Productivity of VAT 8 Table 1 : Tax/GDP ratio and various taxes as a percentage of total tax revenues 9 Table 2: VAT as part of Bangladesh tax system: 10 Table for 2002/03-2007/08 based on data 10 Table 3: VAT’s efficiency 11 Chapter: 4 4.1 Reforms in Bangladesh’s VAT 13 4.2 Implementation Problems 14 4.3 Services: 15 4.4 Improving Taxpayer Compliance: 16 4.5 Review of Compliance Concessions: 16 4.6 Recommendations 17 Chapter: 5 5.1 Conclusion 19 Reference: 20 Chapter-1 1. Introduction The origin of Value Added Tax (VAT) can be traced as far back as the writings of F Von Siemens, who proposed it in 1918 as a substitute for the then newly established German turnover tax. Since then numerous economists have recommended it in different contexts. Also, various committees have examined the tax in great detail. However, for its rejuvenation, the tax owes much to Maurice...
Words: 6094 - Pages: 25
...Revenue Mobilisation and Economic Growth Bangladesh Economic Update November 2013 Bangladesh Economic Update Volume 4, No. 11, November 2013 Acknowledgement Bangladesh Economic Update is a monthly publication of the Economic Policy Unit of Unnayan Onneshan, a multidisciplinary research organisation based in Dhaka, Bangladesh. A team works under the guidance of Rashed Al Mahmud Titumir, comprising Shahida Pervin and Abid Feroz Khan. © Copyright: Unnayan Onneshan The content of this publication may be reproduced for noncommercial purposes with proper citation (please send output to the address mentioned below). Any other form of reproduction, storage in a retrieval system or transmission by any means for commercial purposes, requires permission from the Unnayan Onneshan. For orders and request, please contact: UNNAYAN ONNESHAN 16/2, Indira Road, Farmgate Dhaka-1215, Bangladesh Tell: + (880-2) 8158274, 9110636 Fax: + (880-2) 8159135 E-mail: info@unnayan.org Web: www.unnayan.org Bangladesh Economic Update, November 2013 Page | 2 1.INTRODUCTION This issue of Bangladesh Economic Update probes into the tax system of Bangladesh in the backdrop of falling investment, missing revenue target and growing pressure on revenue. This issue of Bangladesh Economic Update probes into the tax system of Bangladesh in the backdrop of falling investment, missing revenue target and growing pressure on revenue. Bangladesh has comparatively lower tax to GDP ratio, even compared to most of its...
Words: 6582 - Pages: 27
...In case of service rendered by registered person or by a person qualified for registration, VAT would be payable (on the taxable services) at the time of the following, which occurs first: • When the service is provided; • When the invoice relating to the service is provided; and • When payment is received in full or in part. Imposition of value added tax (VAT) – Section 3 1) The value added tax is chargeable and payable at the rate of 15% on the value mentioned in section 5, on all goods imported into Bangladesh, except the goods mentioned in the First Schedule of the Act and on the supply of all goods not listed in the said Schedule and on all services rendered in Bangladesh, except services specified in the Second Schedule of the Act. (2)Notwithstanding anything contained in sub-section (1), zero rated tax would be imposed on the following goods or services: a. Any goods or services exported or deemed to have been exported from Bangladesh; b. Food and other provision supplied to any transport leaving Bangladesh...
Words: 2804 - Pages: 12
...24 25 2 Executive Summary The National Board of Revenue (NBR), as the central authority of tax policy and administration in Bangladesh, plays a critical part in the development of the country. During the current fiscal year (FY 2010-11), NBR is expected to collect Taka 75,600 crore, providing much needed support to the government‟s development efforts. In recent years, Bangladesh‟s tax collection has recorded an impressive growth averaging 20% per annum. Despite this good achievement, a lot remains to be done. Bangladesh‟s tax-GDP ratio at 9.3% remains quite low when compared with other similarly placed countries in South Asia. Less than 1% of the population pays income tax and tax evasion is persistent even though a significant amount of tax revenue is given up in the form of tax incentives. Together, curbing tax evasion and dealing with tax incentives could add 5 percentage points to the tax-GDP ratio, potentially adding about 40,000 crore to the revenue collection. Most of NBR‟s processes are manual and there is little in the nature of taxpayer service and taxpayer education. The NBR also faces problems in its functioning due to its current administrative structure. Despite being under the same board, the different wings of the NBR (Income Tax, Value Added Tax (VAT) and Customs) operate almost independently providing little support to each other in combating tax evasion and providing a unified front to taxpayers. Moreover, the NBR faces the problems of acute shortage...
Words: 9249 - Pages: 37
...the Income Tax Base SUBMITTED TO Tanvir M H Arif, MIBM (UWL/TVU, UK); MBA (CU, BD) Assistant Professor, Department of Finance and Banking. University of Chittagong, Chittagong, Bangladesh. Ex-Asst. Professor, FBA, USTC ; Ex-Lecturer, AUB, Dhaka. And CEO, Corporate Trainer and Consultant (CTC), Chittagong, Bangladesh. UK Experiences: Adjunct Faculty of BRIT College, London Ambassador College and Nelson College. SUBMITTED BY GROUP D Group Profile| SERIAL NO.|NAME DETAILS|CLASS ID|E-MAIL ID| 01|SHAMIN JAHAN SHAWN|09303020|shahjahanh53@gmail.com[->0]| 02|JEWEL SHIL|09303036|takenfromlife@ymail.com[->1]| 03|TAMA SAHA|09303050|tama_cu@yahoo.com[->2]| 04|KUSHUM AKTER SOMA|09303056|Kushumsoma@yahoo.com[->3]| 05|DIPA BARUA|09303060|| 06|SHAMIM AKTHER|09303063|Shamim_cufb_17@yahoo.com| 07|HERO AKTER|09303085|hiruakter@gmail.com[->4]| 08| K. A.M. ATAUL ISLAM|09303111|hassanmrhridoy@ gmail.com| 09|MOHAMMAD JAMIR UDDIN |09303113|Jamir_cu@yahoo.com[->5]| 10|MEJBAH UDDIN AHMED|09303118|mejbah118@gmail.com[->6]| 11|BIBI JOYNUB CHOWDHURANI|09303126|| CONTENTS Chapter -1| Introductory Part| 1.1 Introduction1.2 Aims and Scope of the study1.3 Methodology of the study1.4 Vision of the study1.5 Limitations of the study| Chapter -2| Income Tax Background| 2.1 History of Income Tax2.2 Importance of Income Tax2.3 Drawback of Income Tax| Chapter -3| Tax System of Bangladesh| 3.1 Salient features of Bangladesh Tax system.3...
Words: 13801 - Pages: 56
...Bangladesh’s current tax system * Growth trends and revenue structure of Bangladesh * Contribution of direct and indirect taxes to revenue * Reasons for introducing vat in Bangladesh * Ratio of VAT to Revenue & VAT to Tax * Revenue Structure during Pre and Post VAT Regime * VAT Rates in Selected Countries * VAT Productivity in Selected Countries * Some Important Features of VAT in Bangladesh * Tax Base for VAT * Arguments For VAT * Arguments against VAT * Reforms in VAT: Current Initiatives Introduction: Value Added Tax (VAT) is imposed on value added by a manufacturer of a firm or distributors. Value added tax means a tax on the amount by which the value of an article has been increased at each stage of production. It is a multistage consumption tax imposed on goods and services, which is collected at every stage of production and distribution rather than at the retail stage alone. Objectives of the Study: We can gain knowledge about the tax system (especially VAT) of Bangladesh by studying this topic. As following aspects of tax we can learn from this study: 1. To present an overview of tax system of Bangladesh. 2. To evaluate Govt. Performance in collecting revenue. 3. To identify the effect of the tax system (especially VAT) to economic development of Bangladesh. 4. To identify the problems and weaknesses of collecting revenue through VAT. Salient Features of Bangladesh’s Current Tax System: Notwithstanding...
Words: 1866 - Pages: 8
...increase in cross border transactions in the era of globalised world there has been increase in the number of cases tax evasion & avoidance. The problem of tax evasion in developing countries is therefore exacerbated, where evasion even by a wealthy few can have a comparatively large impact. The revenue needs of developing countries, in combination with the severity of corruption, tax evasion and fraud in many developing countries, highlight the importance of increasing global transparency concerning the location of untaxed wealth. Globalization and the liberalization of economic activity, resulting in the exponential increase in cross border commercial and financial transactions, has in effect converted the private sector into a world without borders. This has created a major problem for national tax authorities because globalization in the private sector has not been accompanied by similar changes in the reach and enforcement powers of national tax authorities. 1.2 In confronting the impact of globalization and liberalization of economies, national tax authorities face several problems. Some of them are illustrated below: 1. National tax authorities has administration of one national government. 2. There is no concept of International tax administration yet. 3. There is a traditional legal rule that one government does not enforce the tax laws of other governments. 4. Bank secrecy and other confidentiality laws (“de jure bank secrecy”) in many jurisdictions...
Words: 7199 - Pages: 29
... Role in International Tax Policy A Research and Policy Brief for the Use of the NGO Committee on Financing for Development Hamrawit Abebe, Ryan Dugan, Michael McShane, Julie Mellin, Tara Patel, and Linda Patentas Graduate Program in International Affairs, Milano School of International Affairs, Management, and Urban Policy, The New School March 7, 2012 TABLE OF CONTENTS EXECUTIVE SUMMARY BACKGROUND AND PERSPECTIVES BACKGROUND AND ANALYSIS THE OECD, G77, G20, AND EU ON UPGRADING THE UN TAX COMMITTEE KEY INSTITUTIONAL PLAYERS ARGUMENTS FOR AND AGAINST A UN TAX BODY 3 4 8 12 17 REFLECTIONS AND RECOMMENDATIONS RELATIONSHIP BETWEEN OECD AND UN TAX COMMITTEE GLOBAL TAX POLICIES POLICY RECOMMENDATIONS 20 28 38 APPENDIX GLOSSARY AND ACRONYMS REFERENCES 44 48 52 2 Executive Summary The report provides an analytical view on the role of the United Nations in tax policy, highlighting the interventions made by and challenges to key players in attempts to streamline global tax cooperation. The first section of the paper provides a background on the importance of tax related issues, emphasizing its importance within the Monterrey Consensus. Debates are introduced between two key institutional players regarding global tax cooperation, the OECD’s Committee on Fiscal Affairs and the UN Tax Committee. Views from key players the OECD, Group of 77, Group of 20, and European Union are addressed in the areas of international tax cooperation, the inclusion...
Words: 20133 - Pages: 81
...1.0 Introduction From the Malaysian perspective, to begin with, there must first be a tax liability under the Malaysian Income Tax Act, 1967 (ITA). Once this is established, then one has to check the provisions in the DTA to see whether a reduction of tax rate or total elimination is available. If so, the DTA must be respected. This is clearly provided in the ITA, namely S 132(1) which states that if the Minister by statutory order declares that arrangements set out in such order been made by the with the government of any territory outside Malaysia in order to give to the relief of double taxation in relation to tax beneath this Act and any other foreign tax territory and it was is expedient that those arrangements should have effect (Choong, 2013). Next, as long as the order remains in force, those arrangements shall be effective in relation to tax beneath this Act notwithstanding anything in any written law. Whilst the above law is quite clear, there have been litigations on this aspect. And, as expected, it has been established that due respect should always be given to the DTAs that the Malaysian Government has entered into (Choong, 2013). 2.0 Scope of DTAs Double Taxation Agreement (DTA) is a deal between two nations who want to avoid double taxation by determining the taxing rights of each nation taking into consideration cross-border flows of revenues and provide tax credits or exemptions to eliminating double taxation (Yong, 2012). The objective of the DTA Malaysia...
Words: 4544 - Pages: 19
...Introduction Value Added Tax is one of the most important sources of tax revenues in Bangladesh. Since its introduction in 1991, VAT is one of the most effective and efficient tools in resource mobilization. Value Added Tax has emerged as a principal instrument of taxing domestic consumption world wide during last four decades. It is now in operation in more than 130 Countries. Value added tax is a primary source of tax revenue in many European and other developed countries. Its importance is also increasing in the developing countries because of its effectiveness in mobilizing local resources. VAT proves to be an efficient tool for revenue collection; its performance, therefore, has direct impact on fiscal mobilization, macroeconomic stability, and development. The basic advantages of Value Added Tax can be stated as its neutrality, tranparency, certainty and self policing mechanism. Customs is an Authority or agency in a country responsible for collecting and safeguarding customs duties and for controlling the flow of goods including animals, personal effects and hazardous items in and out of a country. Depending on local legislation and regulations, the import and export of some goods may be restricted or forbidden, and the customs agency enforces these rules. Customs duty synonyms of tariff and involves a tax on commodities entering and leaving the country. In Bangladesh the levy and chargeability of customs duty are governed by the Customs Act 1969. Objective...
Words: 5106 - Pages: 21
...An Evaluation of the Tax System in Bangladesh Ahsan H. Mansur, PRI Mohammad Yunus, BIDS Presentation Outline Salient Features of Bangladesh’s Current Tax System, Trends in Growth and Revenue Structure VAT System of Bangladesh: Performance, Recent/Past Reforms, Revenue Potential, structural and administrative deficiencies, and alleviating measures Discussions on personal and corporate income tax systems have been covered in this study, but not discussed in detail in in this presentation due to time constraint. Finally the presentation assess the scope for further reforms that the authorities may consider in order to gain more buoyancy in revenue generation POLICY RESEARCH INSTITUTE OF BANGLADESH 01 Introduction: Salient Features of Bangladesh’s Current Tax System Notwithstanding the various fiscal reforms of the recent past, Bangladesh Tax system continues to suffer from a number of major weaknesses: • • • • • • • • Low Level of Revenue Mobilisation Regressive Nature of Taxation (especially VAT) High Tax Incidence Low Tax Base High Degree of Tax Evasion Limited Administrative Capacity Resource Constraints (Human and Logistics) Cumbersome Legal Procedures 02 POLICY RESEARCH INSTITUTE OF BANGLADESH Growth Trends and Revenue Structure of Bangladesh Over the past years total revenue and tax receipts as % of GDP have increased – from 6.5% and 5.5% respectively in FY1982 to 10.9% and 9.0% respectively in FY2010. Tax receipts roughly generate...
Words: 7346 - Pages: 30
