1 introduction taxation system in bangladesh 2015-16

7/25/2019 1 Introduction Taxation System in Bangladesh 2015-16

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KeyWords/Outline

Introduction

Introduction to Taxation System in

Bangladesh

Concepts of Business Taxation


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Issues to be discussed:

Overall Taxation System

Constitutional Provision o Taxation

!e"ulatory #rame$or% o Taxation

Conce&ts o 'usiness Taxation


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OVERALL TAATIO! S"STE#$

Taxes % Collection Authorities

Broad Authority Specific Authority Taxes

NBR (NationalBoard ofRevenue)

Direct Tax Wing Taxes on Incoe and !rofit

"ift Tax

#oreign Travel Tax

Indirect Tax Wing $ustos Duty (Iport Duty% &xportDuty% Regulatory Duty)

'alue Added TaxSuppleentary Duty

Turnover Tax

&xcise Duty

NonNBR Narcotics $ontrol Departent%inistry of *oe Affairs

Narcotics and +i,uor Duty

BRTA% inistry of$ounication

Taxes on 'ehicles

inistry of +and +and Revenue

inistry of +and Stap Duty (Non-udicial)

) *'! is establis+ed under t+eNational Board of Revenue Order, 1972,(..102) 3mended by t+e *'! ,3mendment Ordinance 24 5Ordinance *o. 26 o 2478 &romul"ated by t+e

President on 9une 18 248 $.e.. 21..100. T+e Ordinance $as re&ealed by t+e *'! ,3mendment3ct 20 53ct *o. 12 o 20; 2.2.207 $it+ same content and eect..


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OVERALL TAATIO! S"STE#$

Taxes % Collection Authorities

!E& S'RC(AR)ES introduced in *+,-. to /e collected /y VAT Authority

(ealth 0e1elopment Surcharge 2Section 33 of the 4inance Act *+,-5$ on ad

valorem basis on Cellular @obile Tele&+one Set im&orted and manuactured in

'an"lades+. ?nder &ara"ra&+ ( o t+e eneral Order *o. 11/@usa%/218 dated

2..218 issued by t+e *'!8 tax base or im&orted set is t+e assessable value or

im&osition o im&ort duty and or locally manuactured set8 it is t+e &rice declared and

a&&roved or A3T.


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The Constitution of the 6eople:s Repu/lic of Bangladesh

C(A6TER II$ LE)ISLATIVE A!0 4I!A!CIAL 6ROCE0'RES ;Article 9+ to

Article $ !o taxation except /y or under Act of 6arliament

*o tax s+all be levied or collected exce&t by or under t+e aut+ority o an 3ct o

Parliament Article ,?*$ Interpretation

DTaxationE includes t+e im&osition o any tax8 rate8 duty or im&ost8 $+et+er

"eneral8 local or s&ecial8 and DTaxE s+all be construed accordin"ly.

Article 9,$ #oney Bills

Provisions dealin" $it+ Dt+e im&osition8 re"ulation8 alteration8 remission orre&eal o any taxE s+all be treated as a F@oney 'illG 5Article 9,;,=;a=7

Article 9*$ Recommendation for financial measures

*o @oney 'ill s+all be introduced into Parliament exce&t on t+e

recommendation o t+e President. 'ut in any @oney 'ill no recommendation

s+all be reHuired under t+is article or t+e movin" o an amendment ma%in"

&rovision or t+e reduction or abolition o any tax.


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Accounta/ility of Budget) Article 9? of the Constitution$ Regulation of 6u/lic moneys

under t+e3ct o Parliament

) 6u/lic 4inance and Budget #anagement Act *++< ;Act !o@

-+ of *++


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Legislati1e procedure under Article 9+ of the Constitution

;,= E1ery proposal in the 6arliament for maing a la shall /e made in the formof a Bill@

;*= &hen a Bill is passed /y the 6arliament it shall /e presented to the6resident for assent@

;>= The 6resident. ithin ,? daysafter a Bill is presented to him. shall assent tothe Bill or. in the case of a Bill other than a #oney Bill. may return it to6arliament ith a message reDuesting that the Bill or any particularpro1isions thereof /e reconsidered and that any amendments specified /yhim in the message /e considered and if he failsso to do he shall /edeemed to ha1e assented to the Bill at the expiration of that period@

;-= If the 6resident so returns the Bill 6arliament shall consider it together ith

the 6resident:s message. and if the Bill is again passed /y 6arliament ithor ithout amendments /y the 1otes of a maority of the total num/er ofmem/ers of 6arliament. it shall /e presented to the 6resident for his assent.hereupon the 6resident shall assent to the Bill ithin the period of 7 daysafter it has /een presented to him. and if he failsto do so he shall /edeemed to ha1e assented to the Bill on the expiration of that period@

;?= &hen the 6resident has assented or is deemed to ha1e assented to a Billpassed /y 6arliament it shall /ecome la and shall /e called an Act of

6arliament@


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IR08!BR

#inistry of La

Return to IR08!BR

Ca/inet

6arliament

Standing Committee

6arliament

6residential Assent

Official )aFette

1erifies the technical aspects an Act

prepares the draft Act

places the Act to the Ca/inet for appro1al

@inistry o #inance +as

=ivisions: #inance =ivision8

Internal !esource =ivision ,I!=8

Bconomic !elations =ivision

,B!=8 and 'an%in" K #inancial

Institution =ivision rom

21.12.20. *'! is t+e a&ex tax

body K its C+airman is I!=GsSecretary.

appro1es the draft Act

4inance #inister places the Act in the 6arliament as a Bill

finaliFes the Act ith detailed scrutiny

de/ates organiFed % the Act passed

gi1en to the Act for final enactment

pu/lishes % then circulated

Legislati1e

6rocess of

Enacting a

Tax La


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!e"ulatory #rame$or% o Taxation

Sources of Regulatory 6oerPrimary 3ut+oritiesLe"islative Code: Tax StatutesTreasury re"ulations: Tax !ules K S!O ,Statutory !ules and

Order;3dministrative &ronouncements:*'!Gs Circulars8 Bx&lanations8

Orders9udicial decisions: Aerdicts o t+e


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!e"ulatory #rame$or% o Taxation:Taxes % Tax Las

Taxes Tax +a.s

Taxes on Incoe and !rofit The Income Tax Ordinance 1984 and theIncome Tax Rules 1984

"ift Tax The Gift-tax Act 1990

#oreign Travel Tax on travel /y

air0land0.ater

The Travel Tax Act 200

$ustos Duty (Iport Duty% &xportDuty% Regulatory Duty)

The !ustoms Act 19"9

'alue Added Tax The #alue Added Tax Act 1991 and The#alue Added Tax Rules 1991Suppleentary Duty

Turnover Tax

&xcise Duty on Ban1 Account 2Doestic Air Travel

The $xcise and %alt Act 1944

Narcotics and +i,uor Duty The &arcotics !ontrol Act' 1990

Taxes on 'ehicles The (otor #ehicles Tax Act 192

+and Revenue3)and*evelo+mentTax The)and*evelo+mentTaxOrdinance' 19,"

Stap Duty (Non-udicial) The %tam+

Act' 1899


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EntityGLe1el Tax 1s@ OnerGLe1el Tax on Income

6assGthrough Entity$sin"le-level taxation at o$ner-level only;

o$ner $ill &ay tax on +is/+er total income includin" income rom

t+e entity ,e.".8 sole-&ro&rietors+i&

!onG6assGthrough Entity$ double-level taxation bot+ at entity-level as $ell as o$ner-level; irst entity $ill &ay tax on its income

and t+en o$ner $ill &ay tax on +is/+er total income includin"

income rom t+e entity i distributed ,e.".8 com&any or total

income includin" s+are o income rom t+e entity even i not

distributed and t+en subNect to tax rebate at avera"e tax rate on

t+e entity-level income i t+e entity +as already &aid tax on its

income ,e.".8 &artners+i& irm.


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Role as &ithholding Tax Collector and8or

Taxpayer

'usiness entities may or may not be tax&ayer ,com&any is

normally a tax&ayer i t+ere is any "ross recei&t8 &artners+i&irm is normally a tax&ayer i it +as taxable income; but sole-

&ro&rietors+i& is never a tax &ayin" entity alt+ou"+ its

income is taxable

'usiness entities ,com&any al$ays8 &artners+i& irms in

certain cases suc+ as em&loyer8 but usually not t+e sole-

&ro&rietors+i& +ave to $it++old taxes in &rescribed cases

and to de&osit t+e same $it+in ( $ee%s in case o income tax

and 16 $or%in" days in case o A3T rom t+e date o

deduction or realiation o tax at source.


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TaxGdeducti/le 1s@ !onGdeducti/le #odes of

0istri/ution to Oners

Payment to o$ners as dividend in case o com&any or as

dra$in" in cases o &artners+i& irm and sole-&ro&rietors+i&is never tax-deductible

Payment to o$ners in a orm ot+er t+an dividend ,salary8

remuneration8 commission8 ees8 etc. in case o com&any

may be tax deductible; but not usually deductible in cases o

&artners+i& irm and sole-&ro&rietors+i&.


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Explicit 1s@ Implicit Tax 6aymentExplicit Tax 6ayment is done t+rou"+ de&ositin" to t+e

Treasury as statutory tax.

Implicit Tax 6ayment is done t+rou"+ ado&tin" tax-avoured sc+eme o investments t+rou"+ lo$er &retax

rate o return ,&retax return in taxable savin"s sc+eme is

1>; and &retax return in tax-exem&ted savin"s sc+eme

is >; an investor t+rou"+ investment in tax-exem&tedsc+eme +avin" 2> mar"inal ex&licit tax rate $ill lose

1> return8 $+ic+ is due to im&licit tax.


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Bnd o t+e Presentation

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1 introduction taxation system in bangladesh 2015-16

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