The government is considering an option to raise tax-free income ceiling for individual taxpayers in the coming national budget for fiscal year 2013-2014 considering high pressure of inflation and falling purchasing power of the consumers with fixed income.
National Board of Revenue officials said although the amount of tax-free income threshold was yet to be finalized, it might be increased to between Tk 2.20 lakh and Tk 2.40 lakh from the existing Tk 2 lakh.
Getting green signal from the government high-ups, the revenue board has prepared a proposal with several options for increasing tax-free income limit, they said.
‘Finance minister will take a final decision on the issue after returning from abroad,’ a senior NBR official told New Age.
He, however, did not specify other options related to tax-free income limit.
The government had raised the limit to Tk 2 lakh in the current fiscal year of 2012-13 from Tk 1.8 lakh in the FY 2011-12. In the FY 2010-11, the ceiling was Tk 1.65 lakh.
In the budget proposals, different trade bodies have already recommended to the NBR to raise the ceiling.
Among the business bodies, FBCCI, the apex trade body of the country, proposed to raise the ceiling to Tk 2.4 lakh, Metropolitan Chamber of Commerce and Industry proposed the ceiling at Tk 2.5 lakh and Dhaka Chamber of Commerce and Industry to Tk 3 lakh from the existing Tk 2 lakh.
The FBCCI also demanded for keeping the minimum tax for individual taxpayers unchanged at the existing rate at Tk 3,000. In the current fiscal year, the NBR increased the minimum tax from Tk 2,000 in the FY of 2011-12.
NBR, however, was not in favour of raising the ceiling of tax-exempted income for individuals fearing drop out of a significant number of taxpayers from the tax net. The rate of inflation is also in downtrend compared with the previous fiscal year. But the government is positive on raising the ceiling, NBR officials said.
The revenue board will have to make an intensive effort to off set the revenue loss because of raising the ceiling through bringing more people under the tax net, they said.
In the coming national budget, the NBR has set a target to collect Tk 48,300 crore with 36.82 per cent growth and up by Tk 13,000 crore compared to revenue target of the current fiscal year.
-With New Age input
