ange, stands at TK 3.25 lakh with a starting tax rate of 5 per cent. In Pakistan, the tax-free limit is Pakistan Rupee 4.00 lakh that is equivalent to TK 3.10 lakh and a starting tax rate of 2 per cent. In Thailand, the limit is 1.50 Thai Bhat that is equivalent to TK 3.55 lakh and a starting tax rate of 5 per cent. The percentage of tax payers in Bangladesh is the second highest among South Asian nations after Sri Lanka. If income tax-exempt earning limit remains at Tk2.50 lakh a year for individuals, it may reduce many people's disposable income. The government should have increased tax free income threshold considering inflation. Various quarters, including businesses, have been demanding a rise of the tax-free threshold since the cost of living is rising with inflation. In order to exempt the lower income level group from tax net it is strongly recommended that Tax free limit should be increased from Tk2.50 lakh to Tk3.50 lakh as because for last three years the limit not changed meantime the living expense including all other expenses increased many folds. The another thing is house rent, up to Tk25,000 per month (yearly Tk3.00 lakh) is exempted from the tax net but the individual who earn less than Tk25,000 and their yearly income cross Tk2.50 lakh they don’t get the benefit of house rent exemption. This is not a progressive tax policy. In that case the NBR can think in other way of imposition tax on gross income or to allow the total income including tax free house rent to all individuals. The income tax slab should also be rearranged as tax free Tk3.50 lakh next Tk6.50 lakh 7.5per cent , next Tk5.00 lakh 10 per cent next Tk6.00 lakh 15 per cent next Tk3.00 lakh 20 per cent above 25 per cent . If it can be done the regular tax payer being encouraged and more new tax payer will come into net. Tax collection from the professional like doctors, lawyers, architects, consultants, landowners to be come under strong scrutiny. Tax net to be widen to semi urban and village area as well as there are huge scope to get tax from the well-off persons. It has been unfortunate that sometimes we find whenever tax or VAT being increase than they increase their fees or service prices (Service providers) more than that of the increased amount by keeping some cushion for them, which ultimately shifted to the general people. We strongly demand that considering the peoples demand and commensurate with other neighboring countries tax policy the Finance Minister will rearrange the tax rate and slab.Budget 2018-19
Raise tax free income level from Tk 2.5 lakh to Tk 3.5 lakh
Anwar Faruq Talukder
Finance Minister Abul Maal Abdul Muhith has announced the budget for 2018-19 on June 7. This is the 12th budget of the present finance minister 10th consecutive budget by the present Awami League lead government. Finance minister announced the budget for 2018-2019 for TK4.65 trillion, which is 16 per cent more than that of the previous budget. The budget size for FY 2017-18 was TK4.00 trillion. Though the size of the budget will be so big but the challenges remains to implement the budget in proper way. As per government data the rate of budget implementation in the country has been shrinking gradually over the years. Our budget is deficit budget and the size of deficit is Tk1.21 trillion. The government will cover up the deficit from Foreign loan of Tk50,016 crore, Loan from local banks Tk42,029 Cr and rest 29, 197 Cr from foreign banking system. There are so many good and bad side of the budget. But the expectation of the general people is not see the size of the budget rather they are concern about how it affects their lifestyles. Different business body, economists, journalists, think tankers of Bangladesh have given so many proposals to Finance minister including rising to individual tax analysing various practical issues but unfortunately the Finance Minister didnt take into consideration.
My todays discussion related with the individual income tax. The tax-free income ceiling of Tk 2.5 lakh in Bangladesh which is the lowest in South Asia. In India, the tax-free income limit is Indian Currency 2.50 lakh, which, at the current rate of exchange, stands at TK 3.25 lakh with a starting tax rate of 5 per cent. In Pakistan, the tax-free limit is Pakistan Rupee 4.00 lakh that is equivalent to TK 3.10 lakh and a starting tax rate of 2 per cent. In Thailand, the limit is 1.50 Thai Bhat that is equivalent to TK 3.55 lakh and a starting tax rate of 5 per cent. The percentage of tax payers in Bangladesh is the second highest among South Asian nations after Sri Lanka. If income tax-exempt earning limit remains at Tk2.50 lakh a year for individuals, it may reduce many peoples disposable income. The government should have increased tax free income threshold considering inflation. Various quarters, including businesses, have been demanding a rise of the tax-free threshold since the cost of living is rising with inflation. In order to exempt the lower income level group from tax net it is strongly recommended that Tax free limit should be increased from Tk2.50 lakh to Tk3.50 lakh as because for last three years the limit not changed meantime the living expense including all other expenses increased many folds. The another thing is house rent, up to Tk25,000 per month (yearly Tk3.00 lakh) is exempted from the tax net but the individual who earn less than Tk25,000 and their yearly income cross Tk2.50 lakh they dont get the benefit of house rent exemption. This is not a progressive tax policy. In that case the NBR can think in other way of imposition tax on gross income or to allow the total income including tax free house rent to all individuals. The income tax slab should also be rearranged as tax free Tk3.50 lakh next Tk6.50 lakh 7.5per cent , next Tk5.00 lakh 10 per cent next Tk6.00 lakh 15 per cent next Tk3.00 lakh 20 per cent above 25 per cent . If it can be done the regular tax payer being encouraged and more new tax payer will come into net. Tax collection from the professional like doctors, lawyers, architects, consultants, landowners to be come under strong scrutiny. Tax net to be widen to semi urban and village area as well as there are huge scope to get tax from the well-off persons. It has been unfortunate that sometimes we find whenever tax or VAT being increase than they increase their fees or service prices (Service providers) more than that of the increased amount by keeping some cushion for them, which ultimately shifted to the general people. We strongly demand that considering the peoples demand and commensurate with other neighboring countries tax policy the Finance Minister will rearrange the tax rate and slab.
