The annual tax-free income threshold for individual taxpayers is likely to be increased in the upcoming 2025-26 fiscal year. Currently, the annual income limit, exempted from tax, is up to Tk 350,000, which might be raised by Tk 25,000.
That means, the new ceiling for the tax-free income limit would be Tk 375,000.
Chief Adviser Professor Muhammad Yunus held a meeting with officials from the Ministry of Finance and the National Board of Revenue (NBR) regarding the next fiscal year’s budget on Monday afternoon.
The meeting took place at Jamuna, the official residence of the Chief Adviser. NBR Chairman Abdur Rahman Khan and other senior officials were present there.
Proposed changes to duties and taxes in the budget were discussed during the meeting.
Sources from the meeting said, both regulatory conditions and tax incentives may be eased to encourage enlisting of new companies in the stock market.
Speaking regarding this, NBR chairman Abdur Rahman Khan told Prothom Alo, “The main focus of the upcoming budget is to simplify the tax payment process. Filing returns online will be further encouraged.”
He added that the next budget will be both tax-friendly and investment-friendly.
Meeting sources revealed that the government has agreed in principle to increase the tax-free income threshold and has directed the NBR to take necessary steps.
Discussions were also held on the minimum tax amounts for individuals and companies.
The meeting also discussed setting a flat minimum tax of Tk 5,000 for individual taxpayers, regardless of whether they live in city corporations, municipalities, or rural areas.
Currently, the minimum tax varies between T 3,000 and Tk 5,000 depending on location.
Currently, there are 11.1 million (1 crore and 11 lakhs) Taxpayer Identification Number (TIN) holders in the country, but only around 4 million (40 lakhs) submit tax returns annually.
According to NBR sources, today’s meeting emphasised expanding the tax base and simplifying the tax filing process.
Measures will be proposed in the budget to further expand online return filing, and companies may be required to file returns online mandatorily.
Furthermore, currently, businesses with an annual turnover of over Tk 30 million (3 crore) must pay a 0.6 per cent tax regardless of profit or loss. This rate might be increased to 1 per cent.
Apart from this, local production of refrigerators and air conditioners may face higher VAT (Value Added Tax).
Currently, a 7.5 per cent VAT is imposed at the production level for these items. This could be increased to 15 per cent. Additionally, the VAT rate for mobile phones might also increase based on their value addition.