The was introduced to generate public and state

term ‘tax’ has been derived from the French word ‘taxe’ which means ‘to
charge’. Review of different literature suggests that ‘tax’ was introduced to
generate public and state revenues to cope with the situation after major
crises like famine, devastation of war etc. Likewise, in the Indian Subcontinent
‘tax’ was introduced to raise additional finances in order to replenish the
revenue deficit caused by the Sepoy Mutiny of 1857 (K I Interview). Following
the Mutiny, the British government took over the rule of India from the East
India Company, which was in a bad financial state. To find a way-out, the
government appointed a Finance Member in India, named Mr. James Wilson, who
introduced a bill to the Indian Legislature entitled “An Act for Imposing
Duties on Profits is arising from Property, Professions, Trades and Offices” in
1860. However, the Act did not work well in 1865 and was reintroduced in 1867
as certificate tax, which in turn was converted into regular income tax in
1869. Though the changes over the years improved the tax system in form and
coverage, the income tax was altogether abolished in 1873-74 when there was a
comfortable budgetary surplus (Kumar 2009). However, in 1879-80 taxes ware
raised in the form of license taxes and continued until 1885-86. Meantime, in
1886 the Indian government adopted the Indian Income Tax Act, which was again
amended substantially in 1916 and consolidated in the income tax law of 1916.
In 1922 the All-India Income Tax Committee was appointed. It recommended a
broad-based ‘Income Tax Act’ and necessary institutional arrangement for tax
collection. Based on the recommendations the Indian government adopted the
‘Income Tax Act 1922 (Act XI of 1922) and established the Inland Revenue Board
as the highest authority for income tax. The very ‘Act’ tried to address few
fundamental issues and peoples’ concern, such as the basis for assessing
income, profits and gains, the taxpayer’s choice, etc., but still it was a
continuation of the reactive and centralized tax system of the British ruler
and people’s views and concerns were not reflected in a structured manner.

as a part of Indian Sub-Continent, inherited the British-Indian tax system, in
use until well after its liberation from Pakistan in 1971. However, during the
Pakistani regime from 1947 to 1970, there was a significant change in Bengal’s
land ownership: the abolition of the Permanent Land Revenue Settlement. The
Settlement Regime, introduced by the English Lord Cornwallis in 1793, made the
Zamindars hereditary owners of the land in their possession and gave them total
control over lands, whereby the survival of cultivator (also called Rayot)
would depended on the mercy of the Zamindars. The Zamindars were inducted into
the colonial state system; they were also granted the privilege of holding
property rights at a perpetually fixed rate of land revenue (Islam 2003).

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the context of weak Company administration of land settlement in Bengal, the
Permanent Settlement was instituted, considered a better arrangement than the
Company’s direct involvement. However, the Zamindar system largely failed to
produce any social change and to improve production and well-being of Rayots.
Acting as Culcutta-based absentee landlords, the Zamindars, just siphoned off
wealth for their luxury living. The Rayots’s surpluses were continuously and
systematically extracted by the Zamindars and their intermediaries in the form
of different chandas, nazrana, salami etc. This situation resulted in the
‘Peasants Uprising’ against Zamindars, who demanded the abolition of permanent
settlement in many different places in Bengal. This demand also got political
attention when the Krishok Proja Party, led by A.K. Fazlul Haque, declared its
intention to abolish permanent settlement when people voted them to power to
form the Bengal Provincial government in 1937. Following the election, the
Krishok Proja Party became part of a Coalition government of undivided Bengal
and passed the Moneylenders Act of 1940, which abolished many unjustified fees
and taxes imposed by the Zamindars and also conferred the rights of occupancy
to all categories of Rayots (Islam 2003).

Coalition Government of Bengal also appointed a Land Revenue Commission in 1938
to examine the prevailing land revenue system and put forward recommendation
for its modification. The commission, headed by Sir Francis Floud, recommended
the abolition of the permanent settlement and direct payment of land taxes to
the government. The Commission’s recommendations were executed in 1950, and
abolished the colonial legacy of permanent settlement. Though the then
political processes succeeded in abolishing some colonial legacy, the State
government continued to follow the colonial tax system. Even after the
liberation of Bangladesh, the country followed the British-Indian Income Tax
Act 1922. It was only in 1984 that Bangladesh replaced the 1922 Income Tax Act
by introducing the country’s Income Tax Ordinance, 1984 (XXXVI of 1984) which
came into force on the 1st July, 1984. Ironically both tax systems (e.g. the
Income-tax Act 1922 until 1984 and the Income Tax Ordinance 1984 from July 1984
onwards) that Bangladesh applied were developed or enacted without any
consultation with its stakeholders, especially with the income tax payers. The
former originated with British hegemony in the Indian Sub-Continent and the
later was developed in absence of democracy in Bangladesh (KI Interview).
Nevertheless, Bangladesh upholds a very democratic proposition on tax and the
tax system. Article 83 of the Constitution of Bangladesh says that “no tax shall
be levied or collected except by or under the authority of an Act of