A draft law set to be presented in front of the cabinet will reduce tax evasions, National Board of Revenue (NBR) chairman said on Thursday.
The "Draft Income Tax Law-2022" that proposes releasing income tax refund payments directly into taxpayers' bank accounts through an automated system will also be easier to implement, said Abu Hena Md Rahmatul Munim.
He made the remarks while presiding over a seminar on the law, organised by NBR, at the BCS (tax) Academy auditorium in the capital.
The proposed law comprises various measures such as the abolition of discretionary power of field-level tax officials, which experts believe will make it more business-friendly.
Many people file cases to evade income tax on the pretext of difficult provisions and incomprehensible elements in the 'old Income Tax Ordinance, 1984', said the NBR chairman. The new proposed law will put an end to it, he expects.
Meanwhile, speaking as the chief guest at the seminar, Attorney General AM Amin Uddin recommended taking experts' opinion into consideration before enacting the draft law to make it more sophisticated.
"People feel scared and apprehended when they receive an income tax letter. The new law must be formed in a way that removes this fear. So that people feel encouraged to pay taxes," said Amin.
The current ordinance on income tax, for the most part, is a continuation of the Income Tax Act, 1922, which includes nearly 100-years old provisions, speakers at the seminar said. The socio-economic structure and trade of the country have changed during this period.
Amin said the new law 'was long overdue,' adding that there are scopes to bring a lot of changes in the existing income tax law.
He also said various attempts have been made to simplify the drafted law, which is being formulated in Bangla as part of a government initiative to formulate all laws in the official language of the country. When enacted, international best practice will be embedded in the income tax law-2022.
"The new law will eliminate ambiguity. Tax collection will be easier."
Speakers at the seminar said the existing law does not include a specific line of action on audit selection and conducting audit activities.
The draft income tax law has specific directives on these issues, which will ensure transparency in audits and create a business-friendly environment, they added.
Besides, the proposed law comprises provisions on e-tax management.
If one wants to send money as interest to a non-resident affiliated organisation, they have to follow specific rules.
In addition, provisions have been added to prevent internal transfer pricing and tax evasion. The rules for tax deduction and collection at sources have been made clearer and more precise, which will eliminate all ambiguity in collecting and deducting taxes at sources from residents and non-residents.
Rules for loss adjustment and recovery have been simplified to a great extent. The provisions on business expenditure approval have been further specified as well.