Civil society networks on Tuesday urged the government to take urgent steps to eliminate corruption in collection of Value Added Tax (VAT), putting more emphasis on corporate and direct tax. VAT is a regressive policy, especially for the poor and middleclass consumers, they said at a press conference at the Jatiya Press Club. Among others, Pradip K Roy of Online Knowledge Society, Jibanananda Jayanta of Surakkha O Agrogoti Foundation, Mejbah Uddin Ahmed of Jatiya Sromik Jote and Mostafa Kamal Akanda of EquityBD spoke on the occasion. Rezaul Karim Chowdhury of EquityBD was the moderator.
Reading out the keynote paper, Syed Aminul Haque of EquityBD said there is massive corruption in VAT collection and revenue deposit. National and international companies are involved in the corruption. Foreign and multinational companies are not in the top list as VAT depositors, he said.
The contribution of VAT and other indirect taxes in the internal revenue of Bangladesh is about 70 per cent, while direct taxes are only 30 per cent. The scenario in the developed countries is just the opposite, he added.
Even in India, the contribution of direct taxes is 33 per cent and in Sri Lanka it is 31 per cent. The Bangladesh government increased the VAT rate to 15 per cent, while in Singapore it is just 5 per cent, in Thailand 7 per cent, in South Korea 10 per cent and in New Zealand 12 per cent, he added. The government imposed VAT as dictated by the International Monetary Fund (IMF) even on essential goods, including rice, pulse and oil and in essential services like health and education. He also mentioned that it is the poor who are the worst hit.
Rezaul Karim Chowdhury said that according to Bangladesh Bank statistics, there are about 28,000 personal bank accounts that have more than Tk. 1 crore. But there are only one thousand people who pay income tax more than Tk. 1 lakh. He said the government must emphasise on personal income tax and corporate tax.
He said around 60 to 80 per cent of the national economy is black money, which should be brought under the scanner. But only 23 per cent of the Indian national economy is black money, he added.
Pradip K Roy said almost all the common people pay around Tk. 50 per day as VAT on purchase of essential products.
Speaking about widespread corruption in VAT collection, Jibanananda Jayanta said the government is losing a large amount of revenue because of scarce electronic machines. He labelled tax officials and corporate people as beneficiaries of this corruption.
-With The Independent input
