Businesses to get utilities snapped for unpaid tax

Finance Minister AHM Mustafa Kamal has proposed to empower revenue officials to cut power, gas and water supplies to tax defaulting factories – a measure that hints at a stringent position of the government against tax evasion.

While presenting the budget proposal for FY2022-23, he emphasised on the need to expand the tax net by bringing all eligible tax population of the country within the tax net to enhance capacity to tap more revenue and expand the size of the formal economy.

"I propose to introduce provision of disconnecting utility service connections such as gas, electricity, water etc in case of failure to pay the undisputed revenue demand of the government," said the minister.

According to finance ministry and revenue board officials, there are already provisions allowing the revenue authorities to shut down or take over tax defaulting businesses. But implementation of such measures is rare, leaving the legal provisions ineffective.

Now the authorities are thinking about empowering the deputy commissioners of taxes (DCT) with the utility-snapping power, as businessmen termed it "illogical".    

Representatives of different trade bodies say businessmen in other countries are enjoying several tax cuts to counteract Covid and war-led global fallout. But if the government comes up with such a decision in the budget, it would send a negative message to local entrepreneurs and investors.

But taxmen argue that it is impossible to collect undisputed taxes from businessmen unless the government gets tough and exercises such power.

Finance Minister AHM Mustafa Kamal has placed the Tk6,78,064 crore national budget for FY23 at Jatiya Sangsad according top priority to safeguarding marginal people from inflation fuelled by the Russia-Ukraine conflict.

This is the fourth budget of the third consecutive term of the government led by Prime Minister Sheikh Hasina and also the overall 51st budget of the country.

The proposed budget is Tk74,383 crore higher than the original budget size of the FY2021-22 fiscal year, which was Tk6,03,681 crore.