NBR Plans to Close Tax Loopholes in Fisheries Sector

The National Board of Revenue (NBR) is taking steps to close tax loopholes related to income from the fisheries sector, which has been allegedly misused to legalize black money.

Reduced Tax Rate Under Scrutiny:

Currently, income from the fisheries sector enjoys a significantly reduced tax rate compared to other sectors. While the maximum tax rate for individuals is 30%, income from fisheries is taxed at a maximum of 15%. Experts believe this disparity has been exploited by politicians, bureaucrats, and businessmen to launder illegally earned money.

NBR's Proposed Solution:

An NBR official, speaking on condition of anonymity, confirmed that efforts are underway to amend this reduced tax rate. The aim is to provide some benefits to legitimate fish farmers while minimizing the scope for abuse. A Statutory Regulatory Order (SRO) is expected to be issued soon, likely applicable to the 2025-26 fiscal year.

Wider Tax Benefit Review:

The official also hinted at the potential revocation of some additional tax benefits granted through various SROs to groups and companies outside the fisheries sector.

Expert Endorsement:

Experts have welcomed the NBR's move. Dr Syed Md Aminul Karim, a former NBR member for income tax policy, stated that using the fisheries sector to declare income is primarily a method for whitening black money. He emphasized the need for careful consideration to ensure genuine fish farmers are not negatively impacted, suggesting that small-scale farmers operating within specific income thresholds or on limited land could retain some benefits.

Concerns from Business Leaders:

Some business leaders have expressed concerns about the potential impact on the fisheries sector. Abul Kasem Khan, former president of the Dhaka Chamber of Commerce and Industry (DCCI), argued that while those abusing the tax facility should be punished, cancelling the benefit for genuine businessmen would be unfair. He cautioned that raising taxes significantly could negatively impact the sector's growth.

Transparency International Bangladesh's Stance:

Dr Iftekharuzzaman, executive director of Transparency International Bangladesh (TIB), welcomed the move to abolish the tax benefit, but cautioned against extreme measures. He stressed the need for a thoughtful approach to address the concerns of genuine fish farmers.

The NBR has not released data on the total income declared under the fisheries sector, but reports suggest that some individuals have declared incomes in the crores or even hundreds of crores of taka from this sector to benefit from the reduced tax rate.