No increase in income tax ceiling

Toriqul Islam | Update:

.Despite speculations of raising individual income tax threshold, finance minister Abul Maal Abdul Muhith has kept the ceiling unchanged for the next financial year.

In the proposed budget he placed in parliament on Thursday, Muhith proposed the individual income tax exemption limit at Tk 250,000, the one fixed in the outgoing fiscal year.

In the pre-budget consultations, suggestions came for increasing the threshold at Tk 300,000, especially in a year when the country will go to general elections.

Terming the current ceiling already high, the minister observed that the increase of tax exemption threshold has put a significant number of taxpayers out of the tax net.

Despite popular expectation, the minister struck to the same level of ceiling, given his compulsion to raise revenue when he has a deficit in financing of around one-fourth of the outlay.

However, in the proposed budget, the threshold for women and senior citizen has been Tk 300,000.

“I propose that the tax exemption threshold and tax rate remain unchanged for the next year except that the threshold for a parent or guardian of a person with disability will be higher by Tk 50 thousand for each of such child or dependent,” Muhith said in his speech for 2018-19 budget.

In developing countries, he pointed out, tax exemption threshold is mostly equal to per capita gross domestic product.

“In Bangladesh, tax exemption threshold is almost 200 per cent of per capita GDP. Our tax exemption threshold is high in global comparison,” the minister added.

   
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