The International Business Forum of Bangladesh (IBFB) held a Discussion Session on its recent research findings on “Complexities in the Income Tax Laws: A Quest for a simpler Taxation System” on Thursday, 17 December, 2009 at the Sheraton Hotel, Dhaka. Dr. Mashiur Rahman, Hon’ble Adviser on Economic Affairs to the Prime Minister was present as the Chief Guest, while Mr. M K Anwar, Hon’ble Member of Parliament, and Professor Md. Ali Ashraf, Hon’ble Member of Parliament, were present as Special Guests, while Dr. Nasiruddin Ahmed, Chairman, National Board of Revenue (NBR) was a Guest Speaker. Mr. Mahmudul Islam Chowdhury, President, IBFB and former Mayor, Chittagong City Corporation, chaired the session.

In his speech, Dr. Mashiur rahman said that there is no doubt that there are too many complexities in the Income Tax Laws, but that should not be a cause for despair and for not paying one’s taxes. According to him, it is important that all should pay their taxes in a responsible manner, while transparency and accountability of Tax Officials must be ensured. He also hinted that steps will be taken to simplify Income Tax laws.

Mr. M K Anwar, Hon’ble MP and a former minister, said that if ordinary citizens are unable to comprehend how to pay their taxes, they will not be motivated to do so. If the Government does not receive enough taxes, then it will not be possible to develop infrastructure in the country. He also thanked IBFB for conducting this Discussion Session on the Complexities in the Income Tax Laws.

In his speech, Professor Md. Ali Ashraf regretted the fact that those who earn more and are supposed to pay more taxes do not actually do so, but rather, they try to evade their taxes as much as possible. He felt that there should be thorough discussions in the Parliament on how to simplify Income Tax Laws, and in this case, the Members of Parliament can play a vital role. He also emphasized that the development partners are providing funds for development of the country, but thanks to rampant corruption, this is not always possible.

Dr. Nasiruddin Ahmed , in his speech, said that the Income Tax laws have become so complicated that even he has difficulty comprehending them. He notified everyone that the NBR has already started some activities on simplifying Income Tax laws, and that many of the activities of the NBR will soon become digitalized. He hoped for everyone’s cooperation in this regard.

In his opening remarks, Mr. Mahmudul Islam Chowdhury said that the research conducted by IBFB was done in an unbiased manner due to the relevant importance of the topic. He also hoped that the findings from this research will help the government in determining the right policies and ensuring accountability and transparency in this sector. He also recommended forming a parliamentary caucus with the assistance of the members of parliament, to resolve these problems, along with other business related issues.

The International Business Forum of Bangladesh

Discussion Session

“Complexities in the Income Tax Laws: A Quest for a Simpler Taxation System”

President’s Opening Remarks

Thursday, 17 December 2009

Venue: Ball, Room, Sheraton Hotel, Dhaka

Honourable Dr. Mashiur Rahman, Economic Affairs Adviser to the Prime Minister

Honourable Special Guest Mr. M.  K Anwar, Honourable MP and former Minister

Honourable Special Guest Professor Mohammad Ali Ashraf, Honourable MP and former Deputy Speaker

Respected Members of Parliament

Professor Dr. Khondoker Bazlul Hoque, Chairman, Department of International Business, University of Dhaka

Honourable Chairman of the National Board of Revenue

Members from the Diplomatic Missions and the media

Dear Directors and members of IBFB

Distinguished Guests

Ladies and Gentlemen

Assalamu Alaikum and Good Morning to all of you.

I welcome you all at today’s Discussion Session on Complexities in the Income Tax Laws: A Quest for a Simpler Taxation System of the International Business Forum of Bangladesh.  We are fortunate to have among us Dr. Mashiur Rahman, Hon’ble Economic Affairs Adviser to the Prime Minister, who is also known to be a renowned economist of the country and whom I have known to be a very capable man for a long time, Mr. M K Anwar, Hon’ble MP and former Minister for different ministries who again is a very successful person in his career and member of the Standing Committee on Finance in the Parliament, Professor Mohammad Ali Ashraf, Hon’ble MP and former Deputy Speaker and also Member of the Standing Committee on Finance.  Professor Dr. Khondoker Bazlul Hoque, Chairman, Department of International Business, University of Dhaka, President, Dhaka University Teacher’s Association and former Dean, Faculty of Commerce. The International Business Department is a newly born Department, just as IBFB is again a newly established nationwide trade body, so we have some things in common.  The presence of the Chairman of the National Board of Revenue (NBR) has enriched today’s presentation as it relates to his department.

Ladies and Gentlemen

We have organized our Discussion Session today which is the very next day after we had celebrated our Victory Day.  We had achieved this victory at the expense of nine month’s armed struggle, and also at the loss of millions of lives. This victory had established Bangladesh as a sovereign country. In this month of victory, I respectfully remember the martyrs who had sacrificed their lives and also those who have suffered a lot in this war of liberation.

Dear Guests

Let me first tell you briefly about IBFB and what it does. International Business Forum of Bangladesh (IBFB) is a Government registered nationwide association of business community. Since its launching in September 2006, it has represented nonpartisan, Bangladeshi and foreign business owners, where democracy is very much practiced in house. The primary objective of IBFB is to promote trade and commerce, and for doing so, it puts a lot of emphasis on advocacy through dialogue.  IBFB as a nationwide organization represents small, medium and large enterprises across all sectors of the Bangladesh economy.  We are also an International Membership based organization dedicated to the cause of advocacy.  Individual membership is another option which we provide, and we have been able to make a few intellectuals our proud members. Also unique about us is the fact that we have options for Sponsor membership and at the same time, even students can become our members.  IBFB has also been implementing several projects to advocate for the needs of our members on issues related to Energy, Media, Excessive Interest Rates of commercial banks, Governance and Local Government, Regulatory Reforms Commission, Foreign Direct Investment, the role of the media, etc. We at IBFB strive to identify all common challenges and obstacles faced by the economic constituency and we lobby for any changes in policymaking which we believe will improve the business climate in Bangladesh and at the same time will have a strong and positive impact on the overall economy of the country. Among many of our past activities, we had recently conducted a study on “Public Service Delivery and the Business Environment” particularly on energy and the law enforcement agencies.  We received a very positive response from a good number of the policy makers like Members of Parliament and also the two concerned Parliamentary Standing Committee Chairmen. In fact, the findings from the said study were made public not only in Dhaka, but also in Chittagong and Khulna to create nationwide awareness.

Dear Guests

With the help of an International Specialist from DAI, Washington, DC, Mr. Sani Daher, who is among us, IBFB has formed a Strategic plan, which will play a vital role in ensuring economic development and good governance. This strategic plan of IBFB includes developing manpower for export activities, reducing the cost of capital, development of the agribusiness sector in Bangladesh, popularizing the use of alternative energy sources, improving the tax administration, infrastructure development, reducing red tapism and corruption, etc.

Ladies and Gentlemen

We have gathered here today to discuss some of the findings from our study on Complexities in Income Tax Laws, conducted in collaboration with USAID-PROGATI. There can be no doubt that the Tax Administration is of vital importance. Over the years, organizations and individuals have been frustrated by many of the problems and inefficiencies posed by the tax administration sector. As a result, growth and profitability of many businesses have been hampered. Therefore, we felt the need for conducting a study on this issue, and before sharing the results, let me first provide you with some background on this study.

Respected Participants

From a Stakeholders meeting with our members, it was decided that a study should be conducted on some of the problems that prevail in the Tax Administration of Bangladesh. The Research Cell of IBFB conducted a preliminary study to find out some of the problems that prevail in the Tax Administration. When these results were presented in another Stakeholder’s meeting, it was suggested that the focus should be more on the complexities that prevail when it comes to Income Tax Laws. For this reason, IBFB acquired the services of Professor Swapan Kumar Bala, Associate Professor, Department of Accounting and Information Systems from the University of Dhaka, and also an expert in this topic.

Please note that this study was conducted in an unbiased manner and that the results are only meant to present scenario of the current situation and we hope that based on IBFB’s practical recommendations, the related authorities will take all necessary steps to make any remedies and create an enabling environment for the private sector. Furthermore, we also hope that the Parliament will eventually pass laws which will facilitate the business community, and in turn, the wheels of the country’s economy will move faster.

We hope that you will enjoy our presentation, and hopefully, we will succeed in our endeavor to inform the public about issues relating to the economy and public welfare. These findings will also be presented at Chittagong and Rajshahi very soon.

Once again, I thank the Hon’ble Adviser Dr. Mashiur Rahman, the Honourable Special guests who are the members of the Finance Standing Committee, the honourable MPs, the Chairman of the National Board of Revenue, the distinguished discussants, members from the Diplomatic Missions, media and distinguished guests for taking some of their valuable time off to come and attend our programme. I will now hand over the floor to Professor Bala to present findings from his study.

Thank you all.

Allah Hafez.

Mahmudul Islam Chowdhury

President, IBFB

Former Mayor, Chittagong City, and

Former Member of Parliament

Report on Complexities in the Income Tax Laws:A Quest for a Simpler Taxation System

Presentation on Complexities in the Income Tax Laws:A Quest for a Simpler Taxation System