People's expenses to rise due to pressure of tax

The burden of tax on the general people is increasing in the next budget as tax is being imposed on various products and services which are in daily life.

Duty may increase in the recharge of mobile phone. As a result, the people have to spend additional money to talk over the mobile phone. Duty and tax may be increased on home appliances including the water purifying equipment, air conditioners and refrigerators.

The expenditure of middle income people will increase. Excise duty on bank deposits will increase.

The National Board of Revenue (NBR) sources said it would be difficult to find tax exemption in the upcoming budget as tax exemption in some sectors may be lifted in complying with conditions of International Monetary Fund (IMF).

Speaking to Prothom Alo, Policy Exchange Bangladesh chairman and chief executive officer M Mashrur Riaz said, "We have been passing through high inflation about two and half years. Living costs have increased. So it is not expected to increase duty and tax in such a way."

He suggested rationalisation of tax exemption, prevention tax evasion, realising dues from the state-owned organisations and finding out new sectors for tax for increasing revenue.

Mobile phones have been most essential for the high income to low income people. Alongside talking, Facebook, Messenger and WhatsApp have become part and parcel of daily life. Supplementary duty may be imposed on talking over mobile phone and internet service. 15 per cent VAT has already been imposed on talk time and internet. This may increase by 5 per cent more. If this proposal is approved, the cost of talking on mobile and internet use will increase.

Currently it requires to recharge Tk 133-25 to get service of Tk 100 on mobile phones. 3 per cent supplementary duty was imposed on voice service of mobile phones in the budget of 2015-16 fiscal year. Later, this increased to 15 per cent.

Tk 200 has to be paid as tax to buy new SIMs for mobile phones, which may increase to Tk 300.

LED lights are used in residences. VAT on this lamp may increase from current 5 per ent to 10 per cent. As a result, the price of LEDs may increase. Besides, VAT may increase on tubelight at the same rate. Middle class family tries to buy an AC. 5 per cent VAT may be imposed at the production level. AC production will remain out of VAT till 30 June. VAT on refrigerators at the production level may be increased from current 5 per cent to 10 per cent.

NBR is planning to impose VAT at the production level of various juices including guava, mango and pomegranate

Low middle class families use water purifier. There is one per cent duty to import these equipment.

NBR sources said this duty may be 10 per cent. As a result, the price at the consumer level will increase.

CC cameras are installed in residences and business establishments for security purposes. 10 per cent duty instead of 1 per cent may be imposed on CC cameras. Different companies supply guards to provide security services in the city. Expenditures have to be increased to get these services. VAT may be increased from existing 5 per cent to 15 per cent on security services. Duty on import of lift may be increased from one per cent to 10 per cent.

However, the price of laptops may decrease. Currently 31 per cent duty-tax has to be given to import laptops. That may be decreased to 20 per cent in the upcoming budget.

Community centres and auditoriums are rented out for various events including meetings and get together. Auditoriums cannot be hired without the receipt of tax return submission. Currently, a tax return receipt is required to get 43 types of services. Hiring auditoriums, hotel, motel, restaurant, hospitals, clinic and diagnostic centres may be added to the list.

Tax will not be required to get land and flats as inherited assets.

Tax exempted income ceiling is not increasing. This will remain at Tk 350,000. If a person earns over Tk 3.8 million annually, he or she has to give tax of 30 per cent over the rest of the income.

Black money can be whitened from July next for one year. Any person can take this advantage by paying 15 per cent tax.

Tax may be imposed on the vehicles of members of parliament
25 per cent import duty may be imposed on the vehicles imported by members of parliament. Currently MPs can import cars without duty-tax.

Businessmen get duty facilities in importing some items. That facilities are being reduced.

*This report, originally published in Prothom Alo print and online editions, has been rewritten in English by Rabiul Islam