Reduction for taxpayers outside city corporations
The government is likely to increase the minimum income tax for individual taxpayers living in the Dhaka and Chittagong City Corporation areas and reduce the tax rate for districts level taxpayers considering income and living standards of urban and rural people, officials of the finance ministry said.
They said that minimum income tax for taxpayers in Dhaka and Chittagong City Corporations areas might be raised to Tk 5,000 from the proposed Tk 4,000 while it might be reduced to Tk 3,000 for taxpayers living outside any city corporation.
The minimum income tax rate may remain unchanged at Tk 4,000 for people living in other city corporations.
Finance minister Abul Maal Abdul Muhith on June 4 proposed a uniform minimum income tax rate at Tk 4,000 for individual taxpayers scrapping the current three slabs—Tk 1,000 for rural taxpayers, Tk 2,000 for taxpayers in district headquarters and Tk 3,000 for those living in the metropolitan cities.
At a post budget press conference on June 5, Muhith said that the uniform minimum tax would be reviewed to lessen the burden on rural taxpayers.
Officials of the finance ministry said that the National Board of Revenue on Tuesday placed a summery in this connection before the finance minister.
The changed tax rate will be applicable for the next fiscal year of 2015-16 if it is adopted by the parliament with budget approval on June 29.
Earlier on June 4, the government proposed to increase the tax-free income ceiling for individual taxpayers to Tk 2.50 lakh from the existing Tk 2.20 lakh.
The budgetary measures related to tax-free income limit and minimum income tax rate have become discriminatory for rural and semi-urban taxpayers living in districts and Upazila levels, officials of the revenue board said.
The minimum tax has only been raised for rural taxpayers by Tk 3,000 and for those living in district headquarters by Tk 2,000 while it was increased only by Tk 1,000 for people living in city corporations, the most advanced areas in the country.
The revenue board made the proposal to remove such discrimination for rural and district level taxpayers, they said.
Taxpayers have to pay income tax at the applicable tax rates ranging from 10 per cent to the highest 30 per cent on their income. But they have to pay the minimum tax if his or her income crosses the tax-free income threshold.
Source: New Age