POST TIME: 20 May, 2018 00:00 00 AM
Budget likely to see corporate tax cut

Budget likely to see corporate tax cut

The taxpayers of the country are going to get some good news in the coming budget for 2018-19 fiscal, the last one of the present government, reports UNB.

The tax free income ceiling for the individual taxpayers would be extended while there would be tax cut for the corporate sector.

Finance Minister AMA Muhith will pronounce the new rates in the coming budget that will be placed in the Parliament onJune 7.

According to the National Board of Revenue (NBR) sources, the rate of income tax free ceiling for the individual taxpayers would be Tk 3 lakh in the next budget which is currently Tk 2.5 lakh.

The ceiling for women and people above the age of 65-year would be Tk 3.25 lakh from existing Tk three lakh.

However, the tax ceilings for the taxpayers with disabilities and injured freedom fighters will remain the same – Tk4 lakh and Tk 4.25 lakh respectively

Currently tax free ceiling of the individual taxpayers is Tk 2.5 lakh, which is calculated at 10 per cent rate upto an income of Tk one lakh, at 15 per cent for the income of next Tk five lakh, at 20 per cent for the income of next Tk six lakh, 25 per cent tax for next Tk three lakh and 30 per cent tax on additional income.

Finance Minister AMA Muhith in a pre-budget meeting with the Economic Reporters’ Forum (ERF) has given the hint to increase the ceiling.

From the same meeting the Finance Minister also informed that the corporate tax rate would be reduced.

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 percent,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 e-TIN holders in the country is 34.60 lakh. 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.