bangladesh july 16 2013Rights activists here on Tuesday urged the government to lay emphasis on corporate and direct tax and take effective steps to cut corruption in the VAT collection procedure.

They made the request at a press conference organised by eight rights-based civil society networks at the Jatiya Press Club in the capital.

Syed Aminul Haque of EquityBD read out the group's position paper at the press conference.

Rezaul Karim Chowdhury of EquityBD, Prodip K Roy of Online Knowledge Society, Jibanananda Joyanta of Surakkha O Agrogoti Foundation, Mejbah Uddin Ahmed of Jatiya Sromik Jote and Mostafa Kamal Akanda of EquityBD also spoke on the occasion.

In the group position paper, Syed Aminul Haque said the value added tax (VAT) is regressive especially to the poor and middle class consumers.

He alleged that there is huge corruption in the collection of VAT that involves national and international companies.

"No foreign and multinational companies are found at the top of the list as VAT depositor. The contribution of VAT and other indirect taxes in internal revenue of Bangladesh is about 70 percent while direct taxes are only 30 percent... scenario in the developed countries is contrary to this," he said.

Aminul Haque said the contribution of direct tax is 33 percent in neighboring India and 31 percent in Sri Lanka. "The government of Bangladesh increased VAT rate to 15 percent while it is only 5 percent in Singapore, 7 percent in Thailand, 10 percent in South Korea and 12 percent in New Zealand."

Rezaul Karim Chowdhury said that according to Bangladesh Bank statistics, there are about 28,000 personal bank accounts in the country, each having more than Tk 1 crore.

But only 1000 people give income tax of more than Tk 100,000.

He said the government must lay emphasis on individual income tax and corporate tax.

Prodip K Roy said almost all the ordinary people pay at least Tk 50 per day as VAT while they buy essentials.

Published in The New Nation.