Basic salary, bonus under tax net

Finance Minister AMA Muhith has proposed to impose tax on basic salary, bonus and festival allowance for both government and non-government salaried employees.

“As per existing provision, all allowances excluding basic salary of government employees are tax-free which is discriminatory,” he said.
“As a first step to remove such discrimination, I propose similar tax treatment on basic salary, bonus and festival allowance for both government and non-government salaried employees,” he said.
The government has also announced an increase in salary for government employees from July 1 this year. “I would like to announce in this august House that the new pay scale will be implemented from July 1, 2015. The new pay scale will be implemented in phases,” AMA Muhith said. “Hopefully, this pay scale will ease the lives of government employees in bearing the cost of living. As a result, increased money supply will boost aggregate demand which in turn will contribute to overall economic growth,” he said.

“Besides pay and allowances, for the welfare of government employees, we may take an initiative to establish a commercial and development bank titled ‘Shammridhi Shopan Bank’ as recommended by the Pay and Services Commission,” the Finance Minister said.
The bank is expected to commence operations with an initial paid-up capital of Tk 400 crore. This paid-up capital will be collected by selling primary shares to existing and retired employees, Muhith said.
The FM, in his speech, also stressed on the need to determine appropriate policies regarding deposit collection and the growth path. “We are planning to establish a banking commission to review and recommend measures on banking policies and overall banking activities,” the minister said.
The Finance Minister also pointed to the absence of an authority to manage the activities related to pensions. “At present, more than 5 lakh retired government employees are enjoying pension benefits. There is no designated fund or authority to administer pension related activities of this huge number of pensioners, which may create imbalance in public expenditure management in future,” Muhith said.
“Therefore, we have decided to establish a ‘Pension Fund Management Authority’ to manage government employees' pension,” he said.

Basic salary, bonus under tax net

Finance Minister AMA Muhith has proposed to impose tax on basic salary, bonus and festival allowance for both government and non-government salaried employees. As per existing provision, all allowances excluding basic salary of government employees are tax-free which is discriminatory, he said. As a first step to remove such discrimination, I propose similar tax treatment on basic salary, bonus and festival allowance for both government and non-government salaried employees, he said. The government has also announced an increase in salary for government employees from July 1 this year. I would like to announce in this august House that the new pay scale will be implemented from July 1, 2015. The new pay scale will be implemented in phases, AMA Muhith said. Hopefully, this pay scale will ease the lives of government employees in bearing the cost of living. As a result, increased money supply will boost aggregate demand which in turn will contribute to overall economic growth, he said. Besides pay and allowances, for the welfare of government employees, we may take an initiative to establish a commercial and development bank titled Shammridhi Shopan Bank as recommended by the Pay and Services Commission, the Finance Minister said. The bank is expected to commence operations with an initial paid-up capital of Tk 400 crore. This paid-up capital will be collected by selling primary shares to existing and retired employees, Muhith said. The FM, in his speech, also stressed on the need to determine appropriate policies regarding deposit collection and the growth path. We are planning to establish a banking commission to review and recommend measures on banking policies and overall banking activities, the minister said. The Finance Minister also pointed to the absence of an authority to manage the activities related to pensions. At present, more than 5 lakh retired government employees are enjoying pension benefits. There is no designated fund or authority to administer pension related activities of this huge number of pensioners, which may create imbalance in public expenditure management in future, Muhith said. Therefore, we have decided to establish a Pension Fund Management Authority to manage government employees pension, he said.