The government is unlikely to increase tax-free minimum income limit but may offer an upward revision of the income slabs for the imposition of income tax, officials of the National Board of Revenue said. They said that taxpayers would enjoy less tax burden for higher income if the proposal is passed in parliament. According to the NBR proposal, the tax-free minimum income limit for individual taxpayers may remain unchanged at Tk 2.20 lakh while the limit for women, senior citizens, disabled persons and freedom fighters to be increased to a significant level in the next fiscal year of 2014-15.
Ten per cent tax may be imposed on income of Tk 5 lakh above the tax-free income ceiling of Tk 2.20 lakh, 15 per cent tax for the next 7 lakh, 20 per cent for the next 5 lakh, 25 per cent for the next Tk 25 lakh and 30 per cent for the income above Tk 44.20 lakh.
The existing slabs include 10 per cent tax for Tk 3 lakh above the tax-free income limit, 15 per cent tax for the next Tk 4 lakh, 20 per cent tax for the next Tk 3 lakh and 25 per cent tax on remaining income above Tk 12.20 lakh.
The government may also provide tax holiday facility for the industries to be relocated in underdeveloped regions of the country from the cities like Dhaka, Chittagong, Gazipur and Narayanganj, they said.
Corporate tax for non-publicly traded companies may also be reduced to 35 per cent from the existing 37.5 per cent while the corporate tax for other companies may remain unchanged.
Importers may also get some benefits, including an extended depreciation facility for used cars and rationalisation of CC slabs in the coming budget so that people can get the vehicles at reasonable prices.
Officials said that the revenue board backtracked from its earlier position to impose tax on net income of micro-credit business of non-government organisations due to heavy pressure from external stakeholders and now it would only impose tax on income derived from some sources including bank interest and house rent.
The National Board of Revenue has already prepared the proposals regarding these changes for the next year which the finance minister, Abul Maal Abdul Muhith, will place before the national parliament on Thursday.
Primarily, the NBR prepared a proposal for imposing 10 per cent tax on income derived from microcredit operations of non-governmental organisations in the coming budget but the revenue board got tremendous pressure from the stakeholders for not to do so.
Currently, income derived from commercial activities of NGOs registered with NGO Affairs Bureau is taxable.
Now along with commercial activities, income derived from bank interest and house rent will also be taxable, according to NBR proposal.
Officials said that relocated industries might get tax holiday for 10 years if factories were shifted within 2019 to the underdeveloped districts in the country while newly established industries in the regions will get an extended tax holiday facility for 10 years from the existing seven years, they said.
The NBR recommended the government for providing the tax holiday benefits to the entrepreneurs for relocating factories from the overcrowded cities to keep the cities livable and ensure balanced development in the country.
According to the Income Tax Ordinance-1984, 17 prioritized sectors in industrial undertakings are eligible for getting tax holiday facility.
The industrial undertakings are active pharmaceuticals ingredient industry and radio pharmaceuticals industry, barrier contraceptive and rubber latex, basic chemicals or dyes and chemicals, basic ingredients of electronic industry, bio-fertilizer, biotechnology, boilers, compressors, computer hardware, energy efficient appliances, insecticide or pesticide, petro-chemicals, pharmaceuticals, processing of locally produced fruits and vegetables, radio-active application industry, textile machinery and tissue grafting.
-With New Age input
