Not all tax identification number (TIN) holders will have to pay minimum tax in the next fiscal year, the National Board of Revenue (NBR) said yesterday.

The board, however, said it looks for scope to impose taxes on some TIN holders on a case-to-case basis and aims to bring the local government units such as pourashava and "growth centres" under the tax net by encouraging people to get TIN.

"Our target is to increase the number of TIN holders to get more tax," said NBR member on income tax policy Syed Md Aminul Karim, responding to the media at a press briefing at the NBR office in Dhaka.

“But we are not thinking of imposing taxes on all TIN holders,” he said.

NBR Chairman Nasiruddin Ahmed and other members were also present.

The tax collector shared the view days after Finance Minister AMA Muhith said the government considers imposing minimum tax on all of the 30 lakh TIN holders. Of them, only one-third submit returns.

The NBR said it collected Tk 62,737 crore in July-March of the current fiscal year with an 18 percent growth and expects to beat the entire year's target at Tk 91,870 crore.

In the next fiscal year beginning in July, the NBR aims to collect Tk 112,350 crore in revenue, said its chairman.

"We will also say good-bye to the PSI (pre-shipment inspection) system next year," said Ahmed, adding that the system would stand scrapped from December.

"We are formulating an exit strategy the system," he said.

On whether black money will be allowed to be legalised in the next fiscal year also, Ahmed said there is a provision in the income tax law that one can show his undisclosed money under the head of "income from other sources".

NBR accepts such undisclosed income by imposing up to 25 percent taxes without question. This provision will remain in force through the next fiscal year.

"We will not question if anyone shows his income as income from other sources," said the NBR chief.

The NBR said there is no limit to 'income which can be shown as income from other sources'.

The tax administrator, however, could not give any information on how much undisclosed money may become legalised under the provision of the current law.

Ahmed said the NBR also considers scanning 'transfer pricing' in the upcoming income tax law in a bid to curb siphoning off money out of the country by manipulating the system.

Some $1.8 million are siphoned off from the country each year through the misuse of transfer pricing, said the NBR chairman, citing estimates by various sources.

Transfer pricing happens whenever two related companies -- that is, a parent company and a subsidiary, or two subsidiaries controlled by a common parent -- trade with each other.

For instance, a US-based subsidiary of Coca-Cola buys something from a French-based subsidiary of Coca-Cola. When the parties establish a price for the transaction, they are engaging in transfer pricing.

Transfer pricing is not, in itself, illegal or abusive. What is illegal or abusive is transfer mispricing, which is also known as transfer pricing manipulation or abusive transfer pricing.

"It is very important and is also practisced in other countries," Ahmed said, adding that the NBR would scan how multinational companies use transfer pricing. The NBR would provide training to its officials who will examine transfer pricing, he said.

Ahmed also said the proposed VAT law would be placed in parliament in June for passage.

The Daily Star/Bangladesh/ 1st May 2012