State and Scope of Property Taxation in Bangladesh
Section 4: Implementation Challenges of Bangladesh Property Taxes
- Gap Analysis
Policy Variables Related Challenges of Property Tax
Tools of Property
Tax base
Tax
Tax exemption
Challenges
☐ Multiple property taxes share the same bases - creates double/triple taxation issue
Taxpayers liable to pay wealth surcharge are also subject to pay holding tax along with income tax on
income earned from building ownership
➤ The triple tax burden issue needs to be resolved, and one of the tax burdens should be removed on a
conditional basis
Here, taxpayers' liability for three types of taxes can be traced through NID based interoperable
database and conditions can be applied as an incentive mechanism to avoid triple taxation
Tax base of wealth surcharge is controversial - shall surcharge be imposed on current assets
(stock) rather than income (the flow)??
Individuals with significant wealth but no income cannot pay taxes without selling assets, it affects
taxpayers' ability to pay taxes and hinders tax collection
In view of this, holding income as the tax base is pragmatic for a wealth surcharge.
Tax exemptions are too high in Bangladesh, particularly in terms of threshold of property tax value
and gift tax - it makes the tax base narrow
It undermines public morality regarding tax evasion
It also requires imposition of higher tax rates to compensate the forgone revenue
State and Scope of Property Taxation in Bangladesh
Justice concern
Efficiency concern
Transparency concern
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