The National Board of Revenue has hinted that the government may review the budget proposal of increasing minimum tax for individual for the next financial year to Tk 3,000 from the existing Tk 2,000.
‘The proposal seems regressive for the fixed income group as the government has not increased the limit of taxable income for individual,’ a National Board of Revenue official told New Age on Tuesday.
He said that the reason for a possible review of the proposal was the impact of inflation and the level of increase in per capita income of general people.
‘The revenue expected to come from the increment in minimum tax would not be significant in amount.’
NBR officials said the board would rather prefer to keep the proposal of imposing 2 per cent tax on mobile phone bills as the revenue from this sector would be significant.
Finance minister Abul Maal Abdul Muhith, however, has already hinted at a review of the plan of imposing 2 per cent tax on mobile phone bills.
According to NBR data, out of 10 lakh people who pay tax regularly, 4 lakh people with annual income from Tk 1,80,000 to Tk 3,00,000 pay minimum tax.
NBR officials, however, said that they did not get any indication of withdrawal of the decision on the minimum tax from the finance ministry.
The finance minister in his budget speech proposed to increase minimum tax to Tk 3,000 from the existing Tk 2,000 while the personal taxable income limit kept unchanged at Tk 1,80,000.
The proposal is made considering economic growth and increase in per capita income, Muhith said in his speech.
He also proposed to impose 2 per cent tax at source on the total bill for post-paid mobile subscribers and on every recharge for the pre-paid users.
Both the proposals faced criticism from economists and business leaders.
Centre for Policy Dialogue distinguished fellow Debapriya Bhattacharya said that the government did not consider high inflationary pressure and income of mass people while taking the decision.
‘The unchanged ceiling of tax-free income for individual and the increased minimum tax do not reflect social justice,’ he said at a budget analysis prepared by the CPD.
The decision including tax on mobile bills would also increase tax-burden on the fixed income group while no additional taxes are imposed on big taxpayers, he said.
The Federation of Bangladesh Chambers of Commerce and Industry also urged to reconsider the proposal of raising the minimum individual tax.
The NBR officials said the revenue board wanted to retain the proposal of unchanged tax-free income limit for individual as they wanted to evaluate the impact of the limit at Tk 1,80,000.
‘It is hard to evaluate impact of tax-free income limit in a year,’ they said.