The government will lose more than Tk 4,200 crore due to changes brought in the parliament in the proposed tax measures for the fiscal year 2015-16, according to the primary estimates of the National Board of Revenue said.
Out of Tk 4,200 crore, value-added tax wing of the NBR may get around Tk 2,200 crore less due to reduction in prices of the lowest segment cigarette, reduction in supplementary duty on mobile services and withdrawal of VAT on concrete ready-mix, e-commerce and Unani and Ayurvedic medicine.
On the other hand, income tax wing may incur a loss of more than Tk 2,000 crore due to reduction of tax at source on export and withdrawal of advance income tax on import of some commodities including rice, wheat, raw and refined sugar and edible oil.
The revenue collection from customs duty, however, will not differ significantly due to the changes in the budgetary measures, they said.
They said that the government would get at least Tk 350 crore less as VAT from the cigarettes sector as the finance minister AMA Muhith reduced the price of lowest segment cigarettes to Tk 18 from the proposed Tk 19.
Finance minister made the changes by himself as it was not included in the final documents jointly prepared by the ministry of finance and the NBR, they added.
The VAT wing of the NBR may get Tk 500 crore less because of reduction of supplementary duty on mobile services including talk time and internet uses through mobile phone and Tk 350 due to withdrawal of VAT on e-commerce.
The income tax wing will get Tk 800 crore less because of reduction of tax at source on exports.
Officials said that the income tax wing might lose a substantial amount of taxes if the government reintroduces the tax-benefit on fisheries income as it will create a scope for dishonest taxpayers to evade taxes through declaring imaginary income from the sector and shifting high-taxed income from other sectors to the fisheries income.
Prime minister Sheikh Hasina on Monday suggested the finance minister for fixing tax-free income
ceiling at Tk 10 lakh for the sector and imposing tax at 5 per cent on income from Tk 10 lakh to Tk 20 lakh and 10 per cent on income above Tk 20 lakh.
Tax officials said such unconditional exemption limit for fisheries income will encourage black money holders to show huge amount of earnings from fish farms.
They said taxpayers would abuse the tax-benefit by splitting their income up to the exemption limit in several tax files of their relatives.
Currently, fish farm income is subject to pay income tax at regular rates for corporate and individual taxpayers at 35 per cent and 30 per cent respectively.
Field-level tax officials said they have detected several tax files with a large amount of income from fish farms as it was enjoying a reduced rate of income tax.
The benefit is being given under pressure from the businesses and politicians as usually they misuse the benefit, they said.
The NBR in September last year withdrew the reduced tax benefit on income from fish farms following concerns of taxmen over evasion of taxes by shifting income from other businesses to income from fisheries.
Officials of the VAT wing said that the cut in supplementary duty by 2 per cent would be applicable on the all services including talk time and internet use provided through mobile phone.
They said that the reduced rate would be effective from the date of issuance of the statutory regulatory order which might be issued by today.
Muhith in the budget approval session in parliament on Monday mistakenly said that the supplementary duty on internet use had been reduced to 3 per cent from the proposed 5 per cent.
The announcement created confusion among the stakeholders including internet users as there is no SD on internet use rather the government proposed to impose 5 per cent SD on the services provided by the mobile phone operators through use of SIM and RIM cards.
In this context, the value-added tax wing of NBR on Monday night communicated with the finance minister to remove the confusion and he approved a proposal to reduce the SD for all services provided through mobile SIM and RIM cards, an official said.
The issue is now under vetting process of the law ministry and the NBR will issue an SRO by Wednesday, he added.
Source: New Age