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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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Constitutional Provision o Taxation
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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Constitutional Provision o Taxation
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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Constitutional Provision o Taxation
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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Constitutional Provision o Taxation
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 $xcise and %alt Act 1944
Narcotics and +i,uor Duty The &arcotics !ontrol Act' 1990
Taxes on 'ehicles The (otor #ehicles Tax Act 192
+and Revenue3)and*evelo+mentTax The)and*evelo+mentTaxOrdinance' 19,"
Stap Duty (Non-udicial) The %tam+
Act' 1899
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Conce&ts o 'usiness Taxation
EntityGLe1el Tax 1s@ OnerGLe1el Tax on Income
6assGthrough Entity$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 $ill &ay tax on +is/+er total income includin"
income rom t+e entity i distributed ,e.".8 com&any or total
income includin" s+are o income rom t+e entity even i not
distributed and t+en subNect to tax rebate at avera"e tax rate on
t+e entity-level income i t+e entity +as already &aid tax on its
income ,e.".8 &artners+i& irm.
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Conce&ts o 'usiness Taxation
Role as &ithholding Tax Collector and8or
Taxpayer
'usiness entities may or may not be tax&ayer ,com&any is
normally a tax&ayer i t+ere is any "ross recei&t8 &artners+i&irm is normally a tax&ayer i it +as taxable income; but sole-
&ro&rietors+i& is never a tax &ayin" entity alt+ou"+ its
income is taxable
'usiness entities ,com&any al$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 $or%in" days in case o A3T rom t+e date o
deduction or realiation o tax at source.
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Conce&ts o 'usiness Taxation
TaxGdeducti/le 1s@ !onGdeducti/le #odes of
0istri/ution to Oners
Payment to o$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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Conce&ts o 'usiness Taxation
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
Than you@