Govt to offer tax relief for banks
The government is going to cut taxes on mobile SIM card and industrial raw materials and corporate tax rates of banks and financial institutions in the budget for the next fiscal year.
But it will increase taxes on cars, vehicles, cigarettes and mobile phone sets to collect additional revenue.
The government will not bring any change to the ceiling of individual tax rate, but it will conduct special drives in a good number of places in search of new taxpayers.
The National Board of Revenue (NBR) has set the revenue collection target for the next fiscal year at Tk 61,000 crore, which is Tk 8,000 crore more than the probable target in the revised budget for the current fiscal year. The original target was Tk 54,500 crore.
It has been learnt that the supplementary duty is being increased for motor vehicles, the sector that became the second highest revenue earner in the last fiscal year with 9.42 percent revenue.
Based on the vehicles' cylinder capacity, the current supplementary duties are 20 percent, 60 percent, 100 percent, 250 percent and 350 percent. Sources said the duty for vehicles with lower and medium cylinder capacity would be increased more.
The highest amount of Value Added Tax (VAT) collection comes from the sales of cigarette and bidi. Revenue earning from cigarette is 27.84 percent of the total VAT collection.
The tax on cigarette is imposed on the basis of prices fixed by the NBR. At present, 32 percent supplementary duty is there on cigarette that sells at Tk 6.50 to Tk 7.50 per packet of 10 sticks. The supplementary tax on cigarette priced at Tk 38 and above is 60 percent.
Sources said the prices of cigarettes would be increased in the next budget. The price of low priced cigarettes may be increased by Tk 5-10, they said.
Mobile SIM cards will be cheaper in the next fiscal year as tax on it will be decreased, but mobile phone sets will be costlier. At present there is a fixed tax of Tk 300 on mobile phone sets. The tax may be increased by 7.5-15 percent.
Sources said it would not affect the price of low priced sets much.
The government will lower the tax on SIM card to increase revenue collection by augmenting sale.
At present, there are four import duty slabs--3 percent, 7 percent, 12 percent and 25 percent. Donors have advised the government to further liberalise the slabs.
However, it has been learnt that it will not be lowered except for the 7 percent slab under which most raw materials are imported. The slab may be brought down to 5 percent to cut duty on raw materials.
The number of sectors that enjoy VAT waiver will be brought down to increase revenue earning. The waiver may be given for some items like electronic cash register machine and solar panels.
The corporate tax rate of banks and financial institutions is 45 percent at present. To boost economy and increase investment, Bangladesh Bank has fixed the bank's interest rate at 13 percent as per government advice.
Sources said the corporate tax of banks and other financial organisations may be brought to about 40 percent to compensate their losses.
At present, the tax-free income limit for an individual is Tk 1,65,000, which will not be changed since the inflation rather decreased instead of increasing.
A special survey will be conducted in Bashundhara residential area, Keraniganj, and a good number of places in Chittagong and Sylhet in the next fiscal year in search of three to five lakh new taxpayers.
If additional manpower is available, such drives may also be conducted in a few other district and upazila towns.