Tax-free income limit to move up to Tk 3 lakh
The government may raise the tax-free income limit for individual taxpayers after five years in fiscal 2020-21 to give relief to persons in the lower-income bracket in a way that they are able to manage the monetary hardship brought on by the pandemic better, said officials of the finance ministry yesterday.
The tax-free income threshold may very well be Tk 3 lakh, up from Tk 2.5 lakh fixed back in fiscal 2015-16.
Besides, taxpayers in the low income threshold are also likely to visit a new slab -- 5 per cent -- next fiscal year as the federal government aims to raise the disposable income of taxpayers and their purchasing capacity in the original slab.
Currently, the NBR collects tax from individual taxpayers on five rates beginning from 10 per cent for taxpayers with an annual income of between Tk 2.5 lakh and Tk 6.50 lakh.
The tax rate goes up progressively to 15, 20, 25 and 30 per cent for taxpayers with higher annual income.
Some 30 per cent tax is levied on the taxpayers with an annual income of more than Tk 47.50 lakh, based on the National Board of Revenue (NBR).
In addition to the individual taxpayers, the government can be considering reducing the organization income by 2.5 percentage points to 32.5 per cent for non-listed companies with the view to strengthening their capacity in a way that they get over the devastating aftereffect of the two-month-long lockdown enforced to slow the spread of coronavirus.
Companies typically provide a lot more than 60 per cent of their total direct tax receipts to the state coffer and the government collects tax from companies in a variety of categories -- from as low as 25 % for publicly listed companies to as high as 45 per cent from cigarette makers and non-listed mobile operators.
Some 40 % tax is applied on listed mobile phone operators. Grameenphone may be the lone listed carrier at the moment.
And the tax rate for listed banks, finance institutions and insurance companies is 37.5 per cent. For non-listed banks, finance institutions and insurances, it is 40 per cent.
In addition to the rates, the federal government imposes a lower tax of as low as 5 per cent for manufacturers of air conditioners, refrigerators and motorcycle, 12 per cent for garment factories and 15 % for textile mills.
Besides, a bunch of sectors, such as electricity and it, are enjoying tax breaks.
Officials said medical equipment makers will come into the set of the tax reap the benefits of next fiscal year.
Direct or tax may be the second biggest way to obtain the total tax collected by the NBR.
The share of tax was 33 % of total annual collection Tk 223,890 crore in fiscal 2018-19.
On Sunday, the NBR held a gathering with Prime Minister Sheikh Hasina in her official residence to go over budget proposals for next fiscal year.
The federal government expects the NBR to take tax measures that don't put any strain on the common persons and that protect domestic industries.
The income generation target for the NBR would not go up by more than 5 % in fiscal 2020-21 from the original target of Tk 325,600 crore because of this fiscal year.
