Current Issues and Difficulties opposite Tax collection by Evaluation in Bhutan: a desire for Re-organizing.


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Current Problems and difficulties vis- - vis Taxation by Estimate in Bhutan: a desire for re-organizing ... vis- - vis Taxation by Estimate in Bhutan: a desire for re-organizing ...
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Current Problems and Challenges versus Taxation by Estimate in Bhutan: a desire for Re-organizing By: Gyeltshen Department of Revenue& Customs Ministry of Finance Bhutan

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Current Problems & challenges opposite Taxation by Estimate in Bhutan: an inclination for re-organizing Synopsis Objective of the paper Brief History on Bhutanese Tax System Overview on Estimated Assessment Procedure in Bhutan Strategies proposed Revenue Implications Fairness and Efficiency Merits and Demerits of the techniques proposed Conclusion

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Current Problems & challenges opposite Taxation by Estimate in Bhutan: a desire for re-organizing Objective of the paper "The principle target of the paper is to propose for option methodologies to encourage evaluated appraisal of little and small scale citizens in Bhutan who don\'t have the ability to look after records". Arrangement changes Impracticability of estimation criteria Other disadvantages natural in the current framework or technique

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Current Problems & challenges versus Taxation by Estimate in Bhutan: a desire for re-organizing Brief history on Bhutanese Tax System Taxes imposed in type of kind and work commitment Taxes adapted simply after 1961 i.e. 1 st FYP Types of direct Taxes: CIT and BIT at 30% on NP and PIT at dynamic rate with greatest duty rate of 25% and least of 10% Fiscal target : In short raced to keep meeting the intermittent consumption and in long rushed to meet the capital use and accomplish independence Almost 80% of the aggregate BIT payers are under EA

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Current Problems & challenges versus Taxation by Estimate in Bhutan: a desire for re-organizing Overview of current evaluated appraisal in Bhutan Size of business: Small, medium and expansive Authority to gauge charge: General Provisions of the IT Act. Conditions under which EA is received Tax return not submitted in time Tax Return rejected Failure to keep up legitimate records as required by the statute

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Current Problems & challenges versus Taxation by Estimate in Bhutan: a desire for re-organizing Estimation Criteria: Tax paid in the earlier year in addition to a suitable increment; Export information and Import information (Purchases) with the Department; Tax paid by comparable units; Third Party data; Information accessible with citizen.

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Does the unit keep up legitimate records as required under guideline ? Yes No Reliability of the bookkeeping records Availability of import/send out information from the Customs Division Purchase/Expenditure Income OK Estimate in view of offers Information No Yes Estimate in light of Prior year charge, charge paid By comparative unit or Other data Estimate in view of procurement data Assessment taking into account bookkeeping records

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Current Problems & challenges versus Taxation by Estimate in Bhutan: a desire for re-organizing Policy Problems with Criteria recommended in the statute: Application of suitable increment on past duty installment, Tax paid by comparable units, Determination of assessable benefits. Disadvantages in Estimated Assessment: Reliability of accessible data, Estimation Approach, Room for Discretionary force. Global experience

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Current Problems & challenges opposite Taxation by Estimate in Bhutan: a desire for re-organizing Strategies proposed Percentage on turnover: Eg. 2% on turnover as altered expense risk, Fixed measure of MV assessment relying upon strength Income estimation rather than duty estimation Merger of PIT & BIT Exempt miniaturized scale citizens from salary charge Fixed least wage charge: Nu. 3000 for each citizen with turnover beneath Nu. 1 million

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Current Problems & challenges versus Taxation by Estimate in Bhutan: an inclination for re-organizing Expected Revenue Implications Assumptions: Business units paying expense of Nu.20000 are accepted to have turnover under 1 million. Non-operational elements are avoided Units influenced by de-authorizing are chosen Annual development of citizens is accepted at 5.5%

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(i) Income year 2004 (base year) No. of dynamic citizens who paid assessment 9444 citizens Actual collection Nu. 32.151 Million Expected No. of citizens with 5.5% growth 9963.42 citizens Expected gathering in 2005 Nu. 33.915 Million (ii) Revenue sway in 2005 by exempting yearly salary charge i.e. Zero duty Expected No. of citizens with 5.5% growth 9963.42 citizens Expected revenue 0 Expected income impact Nu. (33.915 million) (iii) Revenue sway in 2005 by proposing a level expense measure of Nu.3000 per annum per citizen with turnover underneath 1 million Expected No. of citizens with 5.5% growth 9963.42 citizens Expected revenue Nu. 29.890 million Expected income impact Nu. (4.025 million)

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Current Problems & challenges versus Taxation by Estimate in Bhutan: a desire for re-organizing Fairness and Efficiency of the proposed techniques: EA is reasonable if has genuinely drawn assessment laws. An expense framework is viewed as reasonable it forces measure up to liabilities on individuals who has the same capacity to pay. In a perfect world, a Tax framework is viewed as proficient if the organization expense is less, consistence expense is unimportant and abundance weight is generally littler. Tax collection by appraisal is sparing and productive. Procedures proposed don\'t promise productivity and decency all the while.

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Current Problems & challenges versus Taxation by Estimate in Bhutan: a desire for re-organizing Equity/Efficiency investigation: Consider two little specialty units with turnover of 1 million each. Even value: Same expense for same turnover Fixed least duty of Nu. 3000 would qualify it. Be that as it may, if the salary level is distinctive yet inside 1 million, then the above proposition don\'t meet the value angle as one of them will pay more duty for less wage contrasted with the other.

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Current Problems & challenges opposite Taxation by Estimate in Bhutan: an inclination for re-organizing Evaluation of proposed procedures from Theory & Practice Inherent straightforwardness and effectiveness in the EA framework. Strategy to decrease managerial weight and in addition willful consistence cost. Dodge muddled accounting framework which might be repetitive to maintain a little business. Settled least assessment includes less authorization expenses and consistence costs and can accomplish efficiency.

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Current Problems & challenges opposite Taxation by Estimate in Bhutan: a desire for re-organizing Less exact and reasonable as the same duty is imposed on various pay levels. Decency can be accomplished just if citizens keep up legitimate books. Decency & productivity can\'t be accomplished at the same time. Both of the two must be traded off to make EA practical with least cost. Productivity may turn into a reason for shamefulness in the event that it is excessively underlined.

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Current Problems & challenges opposite Taxation by Estimate in Bhutan: a desire for re-organizing Merits & Demerits of Proposed systems Merits Straight forward singular amount charge, Opportunity for citizen to pronounce, Curtail un-vital discretion with citizens, Cost advantage to duty power and advantageous to citizens.

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Current Problems & challenges opposite Taxation by Estimate in Bhutan: an inclination for re-organizing Demerits of Proposed methodologies Not fair, Difficult to decide turnover, Not master income, Conclusion EA ought to be connected incidentally with extreme point of making citizens keep up books of records. EA ought to be actualized to acknowledge income as well as to encourage better assessment consistence.

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Current Problems & challenges opposite Taxation by Estimate in Bhutan: an inclination for re-organizing THANK YOU FOR YOUR KIND ATTENTION

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