Act 311 ( Tax )

ACT 311 Taxation

Zayed Mohammad Johny

Definition
According to P.E. Taylor: Taxes are compulsory payment

to government without expectations of direct return in benefit to the tax payer

Income tax Ordinance 1984, Section 2(62), Tax means

the income tax payable under the ordinance and includes any additional tax, excess profit tax, penalty, interest, fees or other charge leviable or payable under the ordinance

Characteristics of Tax
Tax is a payment to the government by the people as it is

levied by the government Payment of taxes is non penal and compulsory An element of sacrifice is there in the payment of a tax to ensure public interest The aim of tax collection is to finance the government expenditure to ensure public interest and welfare. Tax is not the cost of the benefit conferred by the government on the public.

Characteristics of Tax
It is one of the prime sources of revenue for the

government. Tax is not any fine or penalty Tax can only be imposed by the government of a country.

Purpose or objectives of Taxation:

Revenue collection Reduction of inequalities in income and wealth

Accelerating economic growth

Control of consumption Protection of local industries

Economic development

Classification of taxes:
Classification on the basis of impact or incidence of tax: Direct tax: Income tax, Land revenue tax Indirect tax: VAT, Customs duty Classification on the basis of structure of tax rate: Proportional tax Progressive tax Regressive tax Digressive Tax

Classification of taxes:
Classification on the basis of tax base: Income tax Wealth tax Value added tax Expenditure tax Classification according to change in government revenue: Positive tax Negative tax

Role of tax in the economic development of a country

Optimum allocation of available resources Raising governmental revenue

Encouraging saving and investment

Reduction of inequalities in income and wealth Accelerating economic growth

Price stability
Control mechanism

Role of Income tax in economic development of Bangladesh:

Tax Holiday Scheme Investment allowance

Accelerated depreciation allowance

Tax incentives for small and cottage industries Tax incentives for encouraging savings

Tax exemptions in certain expenditures

Tax incentives for foreign investors Allowance for scientific research Tax incentives for remittance to Bangladesh

Scope of Bangladesh Income tax law:

The Income Tax Ordinance 1984 1st July 1984. Chapter:23, Sections and subsections: 187 and Rule: 8 Income Tax Rules 1984 Finance Act SRO (Statutory Regulatory Orders) Income Tax Case Law Brief History of income Tax Law: Shil, Masud and Alam

Definition
Assessee Income Year Assessment year