New tax law to benefit businesses via digitisation

The proposed tax law will align with international best practices and benefit businesses through comprehensive digitalisation, experts say.

They say the law will simplify taxation, reduce arbitrary power, and lower the cost of doing business.

The Income Tax Bill 2023 was presented in parliament on Thursday.

Snehasish Barua, director of SMAC Advisory Service and a member of the income tax review committee formed by the revenue board, said, “We welcome the new income tax law which will cut the cost of doing business through comprehensive digitalisation.”

The new act, for the very first time, has been drafted in Bengali, he said, adding the information provided in each chapter will help taxpayers easily understand allowable deductions for different sources of income.

Keeping in mind the cost of doing business in Bangladesh, the new tax law covers a comprehensive list of deductible business expenses and addresses conflicts with International Financial Reporting Standards, especially in cases of the treatment of the gain or loss of foreign currency, impairment losses, the treatment of right of use assets, gains from asset revaluation, investment property, contribution to Workers Profit Participation Fund, etc., Snehasish added.

Besides, under the new law, the income of certain special purpose vehicles is exempted and the number of return of withholding tax required to be submitted by companies annually has been reduced from 29 to 12, he said.

A number of measures have been taken to reduce arbitrary power like the transparency of the audit process, he also said. The new act aligns with international best practices, introducing share-based payment, demerger-related provisions, thin capitalisation, and General Anti-Avoidance Rule, Snehasish said.