Budget 2021-22: Good news for women entrepreneurs

Women entrepreneurs are probably getting good news through the upcoming 2021-22 national budget as the government is planning to waive tax on them.

In case a woman entrepreneur’s annual turnover drops less than Tk 7 million (70,00,000), she won't require to pay corporate tax. Currently small-medium entrepreneurs with up to transaction of Tk 5 million (50,00,000) annually do not have to pay any tax.

National Board of Revenue officials told this correspondent that the government is going to widen the tax-free transaction ceiling to encourage women entrepreneurs for business.

Businesses are provisioned to pay a certain amount of corporate tax after their annual turnover crosses a ceiling.

Finance minister AHM Mustafa Kamal will propose a budget for the upcoming fiscal on 3 June. In the budget session, he will propose a hike of the ceiling for tax-free turnover by the women entrepreneurs.

There has been no separate tax waiver for the women entrepreneurs in Bangladesh. Like their male counterparts, women entrepreneurs have been running their business in the same competitive markets. The government’s new move is planned for supporting the women entrepreneurs a bit.

Rawsan Ara Parveen runs a fashion house Reflection BD in Narsingdi district headquarters. She started the fashion house during the coronavirus pandemic. She told Prothom Alo, “Such a tax waiver will certainly benefit the women entrepreneurs. They will be encouraged more to do business. Besides, the women entrepreneurs affected by the pandemic will be relieved a bit.”

For the individual male taxpayer, the tax-free income limit is Tk 300 thousand (300,000) while the tax-free income limit for a female taxpayer is Tk350 thousand (350,000). However, NBR will keep the individual tax for the female taxpayers unchanged in the upcoming budget proposal.

The government will exempt tax on the business organisation that recruits people from the marginalised communities like physically and mentally challenged, ethnic minority, third gender or transgender. By this move, the government is expecting to bring marlinalised women under the tax benefits. The organisation recruiting the marginalised people will enjoy corporate tax exemption up to five per cent. There will be an obligation for the organisation to recruit employees from the target communities at a certain percentage of the total workforce (5 per cent) or 100 persons.

Different commercial sectors including the ready-made garments industries are paying salaries of the workers by mobile financial services (MFS). In March, workers’ salaries worth Tk 30 billion (3,000 crore) were paid through the MFSs including bKash, Nagad, Rocket and others. MFSs are becoming popular in salary payment day by day.

But there is no recognition of the MFSs in the income tax ordinance. According to the ordinance, paying more than Tk15,000 as salary requires a banking channel. Otherwise, the employer cannot show the transaction as salary payment.

NBR will recognise the salary payment through the MFSs in the upcoming budget proposal. Besides, NBR will accept payment of rent on commercial space as well as service charges through the MFSs. Currently, payment of service charges more than Tk 50,000 needs a banking channel.

*This report appeared on the print edition of Prothom Alo, has been rewritten in English by Sadiqur Rahman.