The taxpayers of the country are going to get some good news in the coming budget for 2018-19 fiscal.
The tax free income ceiling for the individual taxpayers would be increased, while there would be tax cut for the corporate sector.
Finance Minister AMA Muhith will pronounce the new rates in the next budget scheduled be placed in the Parliament on June 7.
According to the sources of National Board of Revenue (NBR), income tax free ceiling for individual taxpayers would be Tk 300,000 in the next budget which is currently Tk 250,000.
The ceiling for women and people above 65 would be Tk 325,000 from existing Tk 300,000.
However, tax ceilings for the taxpayers with disabilities and injured freedom fighters will remain the same - Tk 400,000 and Tk 425,000, respectively.
Finance Minister AMA Muhith in a pre-budget meeting with the Economic Reporters' Forum (ERF) recently has given hints to increase the ceiling.
At the same meeting minister informed that the corporate tax rate would be reduced too.
The reduction of corporate tax rate was a long standing demand of the businesses.
The tax rate for publicly traded company is 25 per cent, non-publicly traded company is 35 per cent, publicly traded bank, insurance and financial institution (other than merchant bank)/newly established bank, insurance and financial institutions approved by government in 2013 is 40 per cent, non-publicly traded bank, insurance and financial institution is 42.5 per cent, merchant bank is 37.5 per cent.
The tax rate for cigarette, bidi , zarda, chewing tobacco or other tobacco products manufacturing company is 45 per cent, publicly traded mobile phone company is 40 per cent while non-publicly traded mobile phone company is 45 per cent. The tax rate on the income from dividend is 20 per cent.
The Finance Minister in his budget speech last year said, a limited number of sectors including non-listed banks, non-listed mobile phone operators and cigarette manufacturing companies were paying tax at more than 40 per cent rate. "We plan to bring the rate down to 40 per cent gradually of these sectors in future," he said.
Finance Ministry sources said that due to the price hike of fuel oil and agricultural products, and crops damage due to flash flood in the country the inflation rate was higher.
"Considering these matters, the government has decided to increase the income free ceiling for the individual taxpayers," a senior official of the Finance Ministry said.
Responding to a question of lower revenue collection due to the increasing the tax free ceiling, a senior official of NBR said that the revenue collection might be affected due to this process. "But we will fill up the gaps by expanding our tax net," he said.
NBR chairmanMd Mosharraf Hossain Bhuiyan in a recent meeting also said that the revenue collecting authority of the government wanted to expand the numbers of the taxpayers as the taxpayers' ratio in the country is the lowest in the region.
Currently the number of eTIN holders in the country is 3.46 million. Now the tax-GDP ratio of the country is just over 10 per cent. The corresponding figure is more than 15 per cent in the neighbouring countries, reports UNB.