People filing income tax returns for the first time in the current fiscal year will continue to enjoy a reduced minimum tax of Tk 1,000.
The National Board of Revenue (NBR) has retained the benefit in the new fiscal year. First-time return filers will have to pay only Tk 1,000 as the minimum tax, compared with Tk 5,000 for other taxpayers.
Bangladesh currently has 12.8 million Taxpayer Identification Number (TIN) holders, of whom around 4.0 to 4.2 million file tax returns each year.
From this fiscal year, the annual tax-free income threshold has been raised from Tk 350,000 to Tk 400,000.
Under the revised tax structure, the first Tk 300,000 above the tax-free threshold will be taxed at 10 per cent, the next Tk 400,000 at 15 per cent, the following Tk 500,000 at 20 per cent, the next Tk 2 million at 25 per cent and any remaining income at 30 per cent.
Income tax will apply only to earnings exceeding Tk 400,000. For example, a person earning Tk 420,000 annually will be taxed only on the additional Tk 20,000. At the 10 per cent rate, the tax would amount to Tk 2,000. However, existing taxpayers would still have to pay the minimum tax of Tk 5,000. First-time taxpayers with the same level of income, on the other hand, will pay only Tk 1,000.
The NBR has decided to continue this concession for new taxpayers.
Tax returns can now be filed year-round
From this fiscal year, taxpayers will be able to file returns throughout the year, although all returns must be submitted online.
Year-round tax return submission
Under the budget proposal, taxpayers submitting returns in the first quarter of the fiscal year (July–September) will receive a rebate equal to 5 per cent of their payable tax or Tk 25,000, whichever is lower.
Those filing in the second quarter (October–December) will simply pay the amount of tax due without any incentive.
Taxpayers filing in the third quarter (January–March) will have to pay an additional amount equivalent to 2 per cent of the payable tax or Tk 3,000, whichever is higher.
Those submitting returns in the final quarter (April–June) will have to pay an additional 5 per cent of the payable tax or Tk 5,000, whichever is higher.