For bringing both the house owners and the tenants under the tax net, the government is thinking of bringing the payment of house rents under the banking channel.
The National Board of Revenue (NBR) in a recent survey found that both the house owners and the tenants ‘usually evade tax’.
The NBR thinks that if the payment of rents by tenants to house owners is done through banking channel it would be easier for the tax collectors to identify the eligible taxpayers.
NBR chairman Ghulam Hossain first hinted about the matter while holding a pre-budget discussion with the members of Economic Reporters Forum (ERF) on April 30 at his office.
He said that if the payment procedure could be completed through bank cheques, the evasion of taxes could be greatly reduced.
NBR sources said there might be a disclosure regarding this in the next national budget.
NBR chairman Ghulam Hossain during his recent visit to Chittagong for attending two pre-budget business meetings with the directors of Chittagong Chamber of Commerce and Industry (CCCI) and Chittagong Metropolitan Chamber of Commerce and Industry (CMCCI) said that as the apartment owners are not providing facts about the sources of money they have invested in building the apartments, the NBR could not realise taxes from the house owners and the tenants.
He said transactions between apartment builders and their tenants should be done through the banks so that the government could realise the taxes properly.
The NBR chief said they had asked the apartment builders about their sources of money, but ‘they were concealing facts’ about it. The filing officers became helpless. So, the government is deprived of payable taxes, he added.
Thousands of millions of taka were being transacted in the real estate sector every year. But the tenants allege that the owners were not paying due taxes to the government. The tenants were also dodging taxes, NBR chairman said in Chittagong.
The NBR has been mulling bringing payment of house rents under the banking channel as they recently found in a survey that many flat owners of the country dodged income tax years after years.
The tax collecting authority has detected that some 166,500 flat owners and traders are still out of the tax net despite having taxable incomes.
Of them, 45,600 are home owners, mainly in Dhaka City, and the rest are traders. However, around 1,000 of them later submitted income tax returns as they were forced to do so.
According to data provided by the Real Estate and Housing Association of Bangladesh (Rehab), realtors have handed over around 164,000 flats to their buyers since 1992.
The NBR has started collecting apartment owners’ payment information from the realtors in a bid to identify the tax-dodger flat owners in major cities.
It has already collected some information from the developers and instructed its field offices to get more information.
According to a source at the NBR, a good number of people usually registered their flats in the name of their wives, but they hardly pay the taxes.
In December 2012, the revenue collecting authority had launched a survey targeting homeowners and landlords in metropolitan cities, and shops in markets and malls, aiming to bring three lakh new people under tax net.
The initiative came as the revenue authority believes that a large number of people remain out of the tax net despite having taxable incomes.
NBR chairman Ghulam Hossain, at the consultative meeting of NBR and FBCCI on Thursday (May 8), said the revenue collection target for next fiscal year will largely depend on income tax considering its enormous untapped potentiality.
“For the first time, target for income tax will be fixed higher than that of other two wings. Around 38 percent of tax revenue is expected to come from income tax while 35 percent from domestic Value Added Tax and 27 percent from customs duty,” he said.
source: priyo news