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Defining Tax
To tax (from the Latin taxo; "I estimate", which in turn is from tang; "I touch"). Taxes consist of direct tax or indirect tax, and may be paid in money or as its labour equivalent . A tax may be defined as a "pecuniary burden laid upon individuals or property owners to support the government, a payment exacted by legislative authority." A tax "is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority" and is "any contribution imposed by government , whether under the name of toll, tribute, tallage, duty, custom, excise, vat, income tax ,subsidy, aid, supply, or other name.
11/22/2012 (C) Muhammad Abdul Mazid 2010
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Types of Taxes
Ad valorem An ad valorem tax is one where the tax base is the value of a good, service, or property. Sales taxes, tariffs, property taxes, inheritance taxes, and value added taxes are different types of ad valorem tax. An ad valorem tax is typically imposed at the time of a transaction (sales tax or value added tax (VAT)) but it may be imposed on an annual basis (property tax) or in connection with another significant event (inheritance tax or tariffs). An alternative to ad valorem taxation is an excise tax, where the tax base is the quantity of something, regardless of its price
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Excise Duty
an excise is used to compensate a party to a transaction for alleged uncontrollable abuse; Excises (or exemptions from them) are also used to modify consumption patterns (social engineering). For example, a high excise is used to discourage alcohol consumption, relative to other goods. This may be combined with hypothecation if the proceeds are then used to pay for the costs of treating illness caused by alcohol abuse. Similar taxes may exist on tobacco, pornography, etc., and they may be collectively referred to as "sin taxes".
11/22/2012 (C) Muhammad Abdul Mazid 2010
Income Tax
An income tax is a tax levied on the income of individuals or business (corporations or other legal entities). Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate tax, corporate income tax, or profit tax. Individual income taxes often tax the total income of the individual (with some deductions permitted), while corporate income taxes often tax net income (the difference between gross receipts, expenses, and additional write-offs). Principles of Income Tax The "tax net" refers to the types of payment that are taxed, which included personal earnings (wages), capital gains, and business income. The rates for different types of income may vary and some may not be taxed at all. Capital gains may be taxed when realized (e.g. when shares are sold) or when incurred (e.g. when shares appreciate in value). Business income may only be taxed if it is significant or based on the manner in which it is paid. Some types of income, such as interest on bank savings, may be considered as personal earnings (similar to wages) or as a realized property gain (similar to selling shares).
11/22/2012 (C) Muhammad Abdul Mazid 2010
The Genesis.
1757-EIC captured Bengal Bihar and Revenue collection on company law basis through Shetab Roy types of collectors until 1793 1765-trading of commercial goods from Bengal allowed 1773- Regulating Act was passed 1793 Permanent Settlement by Lord Cornwallis 1813-free trade introduced, textile export stopped again it was declared as import item in 1820 1830- Calcutta Docking Company established 1835- English was declared as official language 1838- Bengal Bonded ware house established 1840- tea plantation in the private sector
11/22/2012 (C) Muhammad Abdul Mazid 2010
The Genesis
Under the British Rule, which took over Indian Administration after 1857 mutinies, the first regular Finance Minister Mr Wilson levied the Income Tax in 1860, on English model, income above 200 per anum at the rate of 2% ( 200-500) 3% ( above 500). Abandoned in 1872-73 Re introduced in 1877 First Income Tax Act was Act II of 1886 Then of 1918 and then finally of 1922 Government of India amended it in 1961 Bangladeshs first adoption was in 1984 as Ordinance Other Tax laws ( Customs Excise etc) were from India via Pakistan and Vat Law was first introduced in Bangladesh in 1991 replacing Sales Tax
11/22/2012 (C) Muhammad Abdul Mazid 2010
Tax Laws are framed by Parliament/ Lawmaker to be imposed on the citizens who have elected them to do so. It is enforced /implemented by an executive agency Tax payers are in between law makers and tax collectors Tax laws are old if not archaic, complex, and hazardous to enforce Laws framed in a different context ,faces difficult to enforce in changed circumstances. Should be appropriately reformed suiting the norms nature and culture of the people , re-phrased, should follow a pro tax payers philosophy , pragmatic tax collection procedures should be in place to narrow down the distances between collector and the taxpayers The culture of tax evasion should be reviewed in the context of emerging business, trade and investment in a free and fair play scenario Tax law enforcing agency NBRs capability. Its structure, Manpower, logistics, training and motivation needed to be streamlined.
The Genesis
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Costs of compliance
Although governments must spend money on tax collection activities, some of the costs, particularly for keeping records and filling out forms, are borne by businesses and by private individuals. These are collectively called costs of compliance. More complex tax systems tend to have higher costs of compliance. This fact can be used as the basis for practical or moral arguments in favor of tax simplification , or tax elimination.
11/22/2012 (C) Muhammad Abdul Mazid 2010
Thank you
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