NBR eyes additional Tk 100cr in tax from govt employees

Some 1.34 lakh additional government employees are likely to pay taxes during the current fiscal year due to a spike in their salaries following the new pay scale, taxmen said.

 “We expect to get more taxes from government officials,” said a senior official of National Board of Revenue. The NBR may get an additional Tk 100 crore in tax from state servants, according to the taxmen's estimate.

Previously, about 75,000 government officials were under the tax net.

NBR Chairman Md Nojibur Rahman has sent letters to secretaries of ministries and chiefs of departments to ensure smooth tax collections from government employees.

Taxmen said basic salary, festival allowance and bonus are taxable and the money should be deducted at source as per the income tax law.

A government employee is required to determine payable tax at the beginning of the income year, which is then deducted from the salary every month.

Based on the tax payment, the state employee will have to submit a certificate on tax deduction, which will be issued by the accounts officers along with the income tax returns, the NBR says, which incorporated the provision in the tax rules during the passage of the budget for the current fiscal year.

In the letter sent to secretaries and heads of departments, Rahman emphasised compliance with tax deduction rules during payment of salaries and allowances to government employees.

Taxmen said the approach to deducting tax from government employee income was somewhat lax previously, but the incorporation of the new provision will help ensure tax receipts from all public servants who earn more than Tk 250,000 a year.