The government plans to propose no changes to the tax-free income thresholds of individual taxpayers, firms and Hindu undivided families for FY25, aiming to grant some relief to ordinary taxpayers amid skyrocketing inflation, and encourage them to file returns regularly.
At the same time, the government may propose to increase the existing maximum tax rate from 25 per cent to 30 per cent for individuals with tax slab adjustments, finance ministry sources say.
The proposed slab and tax rate will remain the same in the next assessment year 2025-26 as well, to facilitate the expansion of trade, improve investor confidence in the country's tax system and encourage local and foreign investment.
Surcharge for the wealthy individuals may also remain unchanged in the next FY25. If the net asset value exceeds Tk 4 crore, the surcharge is 10 per cent and if the net asset value exceeds the maximum limit of Tk 50 crore, the surcharge amount is 35 per cent.
Lower corp tax barrier among listed, non-listed cos
The government may propose to conditionally reduce the tax rate from 27.5 per cent to 25 per cent for companies that are not publicly traded, and one-person company tax rate may be reduced from 22.5 per cent to 20 per cent in case of being compliant.
In such cases, all types of income, receipts of any amount, all types of expenses, investments above Tk 5 lakh in each single transaction, and more than Tk 36 lakh in total per year must go through bank transfers.
It may be proposed to conditionally make the tax rate from 22.5 per cent to 20 per cent for listed companies if shares exceeding a certain amount of paid-up capital are transferred through Initial Public Offering (IPO), and proposed to increase the tax rate for cooperative societies from 15 per cent to 20 per cent.
No question asked money whitening at 15%
The government may propose to add a clause on tax incentives in the Income Tax Act, to provide taxpayers with an opportunity to correct any error in their income tax returns, and to increase the flow of money into the mainstream of the economy.
According to the proposed provision, no authority can raise any question if a taxpayer pays tax at fixed rates for immovable properties such as flats, apartments and land, and 15 per cent tax will be imposed on other resources including cash, irrespective of the country’s existing laws.
3% turnover tax on sweetened, carbonated beverages
In continuation of expansion of the tax base, the government may propose to rationalise the tax deduction at source against the supply of gas and petroleum oil, and the rate of collection of tax at source from milk powder, aluminium products, and ceramic products, and calculate such tax as minimum tax.
Moreover, from the idea of taxing sectors harmful to public health and to reduce the health expenditure arising indirectly from such sectors, the government may propose to impose turnover tax on income from production of sweetened beverages at the same rate as on carbonated beverages of 3 per cent, instead of the existing rate of 0.6 per cent.
Also, it may propose to collect turnover tax from any trust.
Tax must on capital gain over Tk50 lakh
The upcoming budget may end individual investors’ exemption from paying tax on capital gains exceeding Tk 50 lakh on listed stocks and mutual funds in line with the IMF’s prescriptions from the next fiscal year.
The current exemption may end in case of any capital gain exceeding Tk 50 lakh, received by a natural individual taxpayer from transfer of shares or units of a listed company or fund.
No depletion allowance benefit for petroleum extract
Companies engaged in petroleum and mineral extraction may not be able to take exemption on disallowance of depletion allowances, and they will be subject to pay tax at regular rate.
Currently, in computing the profits and gains of such undertaking for any year, an additional allowance (hereinafter referred to as the depletion allowance) shall be made equal to 15 per cent of the total income of such undertaking (before the deduction of such allowance) or 50 per cent of the capital employed in such undertaking whichever is the less is exempted from paying tax.
No tax holiday on investments in pvt Hi-Tech parks, EZs
The government may limit the tax break facility of investments by establishments in Hi-Tech Parks. From FY25, only the investments in government Hi-Tech Parks may get tax break facility, and the same provision may be applicable in the case of Economic Zones.
With that target, the Bangladesh Economic Zones Authority (BEZA) has so far secured approval to establish 97 economic zones across the country, comprising 68 government and 29 private EZs.
The National Bureau of Revenue (NBR) then offered a 10-year tax holiday for investors and a 12-year tax holiday for the developers of economic zones and hi-tech parks, aiming to encourage investments and promote more youth employment.
Currently, 92 hi-tech parks or software technology parks or IT training and incubation centres are under construction. Among those, 11 hi-tech parks are established, where operational activities are now running, according to BHTPA annual report for FY23.
PSR must for hospital, clinics & marriage in community centres
The government may impose an obligation to furnish proof of submission of return on obtaining and renewing licenses of hotels, restaurants, motels, hospitals, clinics, diagnostic centres and at the time of receiving services from community centres, convention halls or similar service providers. Mostly, marriage ceremonies are held in such centres.
If a business entity fails to display proof of submission of return at the place of business, it may face a penalty of not less than Tk 20,000 and not more than Tk 50,000.
1% source tax on essentials supply
The government may rationalise the rate of tax deduction to 1 per cent from 2 per cent source on the amount paid or borrowed by the bank or financial institution in respect of the local letter of credit opened or made for the purchase of rice, wheat, round potato, onion, garlic, beans, gram, lentil, ginger, turmeric, dry chillies, dal, maize, coarse flour, flour, salt, edible oil, sugar, black pepper, cinnamon, almonds, cloves, cassia leaves, jute, cotton and yarn.
Miscellaneous
An exempted person may pay tax at the regular rate by surrendering his tax in whole or in part.
Besides, if a person is exempted from tax against income from any one source for a certain period, he/she may not be exempted from tax again against income from such source for any other period.
Such a person may be exempted from tax even if such person is reorganized by any kind of merger, demerger and acquisition.
