Formulation of the new income tax law set to be delayed as the National Board of Revenue has yet to complete preparations.
The draft is scheduled to be placed at the parliament for approval during the upcoming budget session aiming to implement the new tax regime from the next fiscal year 2018-2019 replacing the existing Income Tax Ordinance 1984.
The revenue board is set to miss the both targets, officials said.
They said that the income tax wing had apparently adopted a go-slow policy on preparation of the law as there is no pressure or reminder from the finance ministry or NBR high-ups.
There is also no progress in appointing consultants for finalising the draft of the law in Bengali.
The proposed law will be mainly in Bengali language with official and authentic English version.
The drafting committee of the NBR has already completed the English draft of the law and progressed 75 per cent of the preliminary Bengali version of the draft.
They assumed that forthcoming national elections might be one of the important reasons for the delay.
There were hardly any instances that a new law that might have significant impact on fiscal policy in an election year, said a high official of the NBR.
So, the board was moving slowly and the formulation of the new income tax law might be delayed further, he said.
There is also a verdict of the Supreme Court nullifying the fifth and seventh amendments to the constitution through which the Income Tax Ordinance 1984, along with other 166 laws, lost effectiveness.
The NBR in August last year placed the draft of the income tax law transforming the existing ordinance into a law as per court order before the cabinet.
However, the cabinet sent the draft back instructing the NBR to place it as soon as possible incorporating international best practices and updating other relevant issues.
The revenue board then decided to proceed with the new law instead of transforming the existing ordinance into a law as it was working with the new law for long.
The NBR planned to unveil the draft in December for stakeholders’ opinion.
Officials said they would continue their preparation despite the apparent hindrances.
Two teams, policy and draft making, of the NBR had just concluded a study tour in Netherlands regarding drafting of such a law and international taxation system, they said.
International best practices and emerging global business issues were supposed to be finalised during the tour with the help of experts of the country, they added.
Emerging business dimensions and international taxation issues like merger and acquisition, transfer pricing, money laundering, profit shifting and money laundering, digitisation of tax system, expansion of tax net, minimising the scope of tax exemption, reduction of corporate tax rate, narrowing the existing mismatches in the rules and regulations would be focused in the new law.
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