The government is planning to introduce a unified system of tax collection at certain rates on total income of an individual or company instead of the existing fragmented system.
The National Board of Revenue (NBR) has been asked to prepare a draft concept paper in this regard, officials said.
The National Committee for Monitoring of Doing Business Reforms (NCMID), held at Bangladesh Investment Development Authority (BIDA) in October last year, had decided to explore the possibilities of the system and requested the NBR to prepare the concept paper.
In a recent letter, BIDA has requested the NBR to let it know the progress and submit the paper before the next meeting of the committee.
Sources said the government would take a final decision in this regard based on the draft concept paper and stakeholders opinion. BIDA has a plan to hold workshops with the stakeholders concerned on the concept paper, they added.
The NCMID had also requested the NBR to introduce an online submission system of corporate tax returns and a tax correction system by next six months.
A senior official said the NBR will have to adopt a unified tax collection system to simplify the procedures as existing separate tax collection methods increase both tax burden and cost of compliances.
The proposed system would facilitate a person knowing his total paid taxes to the public exchequer, he added.
Nearly 80 countries across the world have a unified tax collection system, he added.
Officials said introduction of a unified tax collection system depends on the political decision of the government, not the bureaucracy.
Currently, the income tax wing collects taxes based on the annual income of an individual or companies. VAT is a consumption tax that people have to pay at the time of availing different services or purchasing goods. Customs wing collects duties and taxes on import and export of products.
Economists, however, welcomed the new concept of collection of internal revenue.
Dr Ahsan H Mansur, Executive Director of the Policy Research Institute (PRI), said the NBR wings will have to start working together and share data with each other to adopt the system.
He said existing separate Taxpayers Identification Number (TIN) and Business Identification Number (BIN) are not required for a person or a company.
A taxpayer should hold one identification number under which he would pay tax and know the amount of his total paid taxes to the public exchequer, he added.
Dr Mansur, however, said companies know their total paid taxes but not the individuals.
He said the internal revenue is mobilised in an integrated way in the developed countries.
Official sources said the time and cost of paying taxes on doing businesses will reduce significantly if the proposed system is launched in Bangladesh, which lags behind most of the neighboring countries on paying tax reforms.
On paying tax, Bangladesh's rank is currently 151 in the global index. The rank remained almost stagnant for several years due to lack of reforms in tax administration and tax measures.
In the Ease of Doing Business Report-2020 of the World Bank, the ranking of India is 115, Bhutan 15, Sri Lanka 142 and the Maldives 119, Malaysia 80, Thailand 68, Indonesia 81, Vietnam 109, Cambodia 138, and Singapore 7.
However, Bangladesh's position in the paying tax index is better than those of Pakistan, Nepal and Afghanistan that ranked 161, 175 and 178 respectively.
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