The government will propose some changes in the income tax ordinance for the next fiscal 2021-22.
The changes will intensify the sufferings of the taxpayers. The burden of tax on them may increase.
Opportunities to avail various services including car fitness renewal and registration may be stopped in case of failure to submit the annual income tax return.
Advance income tax will be imposed on the fruits and vegetable importers. Besides, submission of financial statement along with turnover tax return will also be made mandatory.
Let’s see the possible tax burdens that will be imposed in the upcoming budget. Currently, there are around 6.2 million (6200,000) tax identification numbers in Bangladesh. Credit card holders and land purchasers are not required to submit a return even if they do not have taxable income. The remaining people are bound to submit their tax return.
According to National Board of Revenue (NBR), 2.5 million (2500,000) people on an average submit tax return every year while 1-1.2 million (1000,000-1200,000) people collect TINs to avail credit card and land. The remaining 2.5 million (2500,000), though are TIN holders, do not submit their returns. NBR terms them non-filers. In the budget session, the finance minister will issue a warning so that NBR takes strict measures against such of the non-filers. The receipt copy of The amount of fine may increase in the next year.
Only the TIN certificates were required for renewal of car fitness and registration and to participate in the tender for contract. The copy of receipt of return submission may be made mandatory for taking government services.
A taxpayer gets tax rebate while investing in some government-designated sectors (such as savings certificates, stock market, provident fund, FDR and etcetera). A taxpayer can invest 25 per cent of personal income or Tk 15 million (1.5 crore) maximum. The limit of investment may be brought down to Tk 10 million in the upcoming budget.
As a result, investment scope of wealthy people will decrease. Currently, the rate of investment tax rebate is 15 per cent for income up to Tk1.5 million (15 lakh) and 10 per cent for income above Tk1.5 million (15 lakh).
The next budget may be more uncomfortable for the wealthy investors, because, the tiers of surcharge will be rearranged. One tier will be removed.
The tiers of surcharge will be following–no surcharge on the income up to Tk 30 million (three crore); 10 per cent surcharge on the income between Tk30-50 million (three-five crores); 15 per cent surcharge on Tk50-100 million (five-10 crore), 20 per cent surcharge on Tk100-200 million (10-20 crore); 30 per cent surcharge on Tk200-500 million (20-50 crore); and 35 per cent surcharge on more than Tk500 million income.
At present, 30 per cent surcharge is imposed on 30 per cent of income tax in case a taxpayer owns more than Tk 200 million-worth capital.
The new fiscal policy may increase the rate of surcharge on the wealthiest investors owning more that Tk500 million-worth capital.
The large-scale fish farmers will get bad news from the new budget.
Currently, the government imposes 10 per cent of tax if the income exceeds Tk 2 million (20 lakh) in this sector.
The new budget may impose 15 per cent of tax if individual income exceeds Tk 3 million (30 lakh). Fish farmers have to pay five per cent of tax on their income ranging between Tk one-two million (10-20 lakh).
Importing fruits and vegetable might be expensive. Bangladesh imports varieties of fruits and vegetables including cherry tomato, asparagus, capsicum, apple, pear, orange, malta, water melon, dragon, strawberry, blue berry, black berry and other. The exotic varieties are now available at super-shops in Dhaka and other cities. Currently the importers of fruits and vegetable do not pay advance tax.
According to finance division, the new fiscal policy may impose five per cent advance tax on import of such fruits and vegetable.
There will be bad news for taxpaying companies too. They will not be relieved only by submitting VAT return from the next fiscal. The new budget proposal will bind the companies on submitting their financial statements to VAT office within six months.
*This report appeared on the online and print editions of Prothom Alo, has been rewritten in English by Sadiqur Rahman.