The excess taxes that people paid on their earnings in July and August won’t be refunded to them. However, the amount will be adjusted with the tax returns next years.
“According to the National Revenue Board’s order 10 percent tax was imposed. But from September 5 percent is being imposed,” said Department of National Savings Director General Shamsunnahar Begum.
She added that the five percent tax deducted at source won’t be returned to them in the form of cash.
Although Finance Minister Mustafa Kamal didn’t say anything regarding the matter during his budget speech for the new fiscal year on Jun 13, the tax deducted at source on savings was announced to be 10 percent that very day.
However, following criticism, the minister said that if the investment for savings bond does not exceed Tk 500,000 then the tax deducted will be 5 percent, to be effective from Jul 1.
NBR issued a gazette in this regard on Aug 28 saying that the tax will be 10 percent if the investment amount exceeds Tk 500,000.
Former NBR chairman Mohammad Abdul Majid said that if the government charges extra tax there is no scope for refund but only adjustment.
Policy Research Institute Executive Director Dr Ahsan H Mansur said that the amount cannot be refunded as the system isn’t automated.
“In most countries, the money is refunded after claim but the system doesn’t exist in Bangladesh,” he said.
He said that if specialized employees are appointed and the system is automated then the revenue will increase as well.
According to NBR sources, many tax payers end up paying extra as the employees deduct several types of taxes.
Meanwhile, NBR employees said that there is a provision to claim the extra amount paid under the Income Tax Ordinance 1984 but tax payers don’t apply for the refund for fear of harassment or questioning.
Layer Golam Mostafa Rabbani said that the refund system no longer exists but if anyone has paid extra tax they can adjust it and keep doing so for five years straight.