Bangladesh government has placed the budget for the fiscal year 2023-24 in the Parliament on the 1st of June 2023. One of the important provisions in the budget is the requirement of submission of proof of tax return as well as paying a minimum income tax of Tk 2 thousand to avail 38 types of government services even though their income is below the taxable income. The 38 services range from seeking loans of greater than Tk 5 lakh to acquiring trade licenses, renewing professional memberships, participating in shared economic activities, and competing in national elections, among others. People will need to show proof of submission of a return of Tk 2 thousand minimum tax to avail the above-mentioned services.
This has raised the fundamental question of whether it is ethical for the government to demand citizens to file a return and pay a minimum tax even though their income is below the threshold level to receive certain government services including contesting in national elections. This provision may impose an undue burden and restriction on potential candidates who may not have the ability to pay the minimum taxes of Tk 2 thousand in certain years.
The 38 government services specified in the budget can broadly be categorized into two groups: welfare-based services and right-based services. While welfare-based services aim to improve the overall well-being of the population and are discretionary (depending on resource availability), right-based services are fundamental entitlements of a citizen that are recognized and safeguarded by the Constitution. It is critical that the government safeguards and upholds the citizens' rights without discrimination.
One of the contentious issues in this budget is that it touches on one of the fundamental rights of citizens: the right to contest in national elections. The right to be contested is a constitutional privilege granted to the citizens and every citizen who meets the legal conditions has an opportunity to run for the public office. This is an essential component of democracy, defined by Bangladesh's supreme law and the Constitution.
Article 66 of the People's Republic of Bangladesh Constitution stipulates the qualifications and disqualifications for contesting in national elections. According to the Article 66, a person is ineligible for election as, or for being, a Member of Parliament if (1) s/he is declared by a competent court to be of unsound mind, (2) s/he is an undischarged insolvent, (3) he acquires the citizenship of, or affirms or acknowledges allegiance to, a foreign State, or (4) he has been convicted for a criminal offense involving moral turpitude and sentenced to suffer imprisonment of two years or more unless a period of five years has elapsed since his release, (5) s/he holds an office of profit in the service of the Republic or (6) s/he is disqualified for such election by or under any law.
The eligibility criteria to contest national elections in Bangladesh is further elaborated by the Representation of the People Order (RPO) 1972, a subordinate law made under the Constitution. According to the RPO 1972, a person shall be disqualified from being nominated or elected as a member of parliament if s/he fails to submit income tax returns or pay income tax as required by any law for any of the five years immediately preceding the year in which the election is held. According to RPO (though RPO cannot go against the Constitutional spirit), the person is required to file an income tax return, but there is no requirement to pay a minimum tax even if her/his income is below the income tax threshold.
This new provision in the budget has sparked a lot of discussion and debate. While the government needs revenue to provide public services, imposing a minimum tax as a condition in accessing constitutionally mandated services has generated serious concerns. A minimum tax, regardless of income level, is regressive in nature as it disproportionately affects low-income individuals and violates the ability to pay tax principle. It places an additional financial burden on those who already struggling to meet their basic needs and might potentially deprive them of accessing the fundamental government services like contesting for national and local offices. It also goes against the overall development vision of Bangladesh that of promoting an inclusive and equitable society.
Although the legal requirements for contesting a national election may vary depending on the situation of the country and the type of office, they should be based on the constitutional spirit of the country. The requirement for paying a minimum tax even though the person has no taxable income is a rare case in both developed and developing countries. While different countries have different requirements for candidacy in national elections, there is no widespread practice of demanding proof of tax returns for candidacy in national elections. The candidates may be required to disclose financial interests or sources of income but there is no requirement to pay a minimum tax for candidacy. The founding fathers of the Constitution of Bangladesh recognized the value of people's participation in public affairs and did not discriminate based on their economic conditions. Therefore, the right to be contested in election should not be limited or restricted to only rich people. As such, the stringent provisions of paying a minimum tax of TK 2 thousand for running in national and local elections should be withdrawn immediately.
Golam Rasul is a Professor at the Department of Economics, International University of Business Agriculture and Technology (IUBAT) in Dhaka, Bangladesh.
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