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Existing tax system creates burden on low-income people

21 Nov,2018

BDchronicle:

The existing tax system has created burden on common people as low-income and high-income people pay value added tax (VAT) at similar rate to buy a product.

Speakers came up with the statement at Citizens’ Tax Tribunal 2018 at Nawab Ali Chowdhury Senate Bhaban Auditorium at University of Dhaka. on Tuesday, said a press release.

ActionAid Bangladesh organised the programme with an aim to bring attention of government and other stakeholders to ensure progressive tax system that reduces the burden on the poor.

They also call for bringing transparency in tax system and lessening discrimination between rich and poor in taxation to encourage people to pay taxes.

They said the government has to impose more taxes as existing tax system encourages money laundering and tax evasion.

"Thus, common people face more pressure to lead their lives," they opined.

Moderated by AAB country director Farah Kabir, DU professor M M Akash and parliamentarian Fazle Hossain Badsha addressed the programme as jurist while DU professor Dr Kazi Maruful Islam, Coalition for Urban Poor executive director Rebbecca Sun-Yat and Samajtantrik Shramik Front general secretary Razekuzzaman Ratan attended the session as amicus curiae.

Mr Akash said the country has made progress in many indicators – notable reduction in foreign aid dependency, continuous economic growth over 6.5 per cent (7.5 per cent as per government estimation) while social indicators have been very impressive.

Then, why people still don’t want to pay taxes, he asked saying, “Poor people are facing discrimination as the country’s growth hasn’t been inclusive.”

Speaking at the programme, Mr Badsha said current VAT system is discriminatory and has created burden on low income people like garment workers, slum dwellers, day labourers and students.

Meanwhile, tax burden fell on general citizens due to money laundering by rich people and tax evasion by businesses and corporate organisations, he, also the general secretary of Workers’ Party of Bangladesh said.

Maruful Islam said coverage of direct tax should be broadened to diminish indirect tax burden on poor.

People are paying taxes but they aren’t getting satisfied with the return from it, he said adding, “What is happening to that money? Businesses are getting benefitted; they are evading taxes and siphoning the money abroad.”

Fatema Sultana, a garment worker, said garment owners get 4.0 per cent subsidy on their export while they also get many financial benefits for the government and banks.

“Our wage is very small in size; we pay taxes (VAT) like every other person in the country, but the workers need to come to streets for a little increase in their wage,” she said.

She also said house rent, health and education cost, utility charge, cost of daily essentials are mounting very fast but workers’ wage isn’t increasing that much.

Mrs Sun-Yat said VAT-tax collection isn’t increasing at the rate of rising number of businesses, which means they are dodging taxes.

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