Tax-free income ceiling likely to increase

The government is likely to increase the ceiling for tax- free income from the present Tk 2.50 lakh to Tk 2.75 lakh from the next fiscal year, National Board of Revenue (NBR) sources said.

The proposed move comes in the wake of demands from taxpayers and trade bodies for adjusting the threshold with annual inflation and living conditions of the people.
Sources said though a significant number of taxpayers might go out of the tax net following the increased ceiling, the government may take the decision to give them relief as the threshold has remained unchanged for the past two years.

The government had last increased the ceiling for tax- free income from Tk 2.20 lakh to Tk 2.50 lakh in FY2014–15.
The government did not raise the ceiling in the past two years in order to widen the tax net, even though the annual average inflation rate rose above 5.6 per cent during that period, trade bodies claimed. The NBR sources said the tax-free ceiling for women, elderly citizens, people with disabilities and freedom fighters will also be hiked.
At present, the tax-free income ceiling is Tk 3 lakh for women and senior citizens, Tk 3.75 lakh for people with disabilities, Tk 4 lakh for parents of children with disabilities, and Tk 4.25 lakh for freedom fighters.
The amount of minimum income tax, however, may remain unchanged at Tk 5,000, Tk 4,000 and Tk 3,000 for taxpayers living in areas falling under city corporations, districts and upazilas respectively.
Trade bodies, including the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), have demanded an increase in the ceiling, considering the rate of annual inflation and overall living standard of people.
Earlier, at a pre-budget discussion with the NBR, the FBCCI had demanded fixing the ceiling at Tk 3.25 lakh in the budget, while the Dhaka Chamber of Commerce and Industry wanted it to be Tk 3.50 lakh.
In the US, the annual tax free income limit is USD 10,000. It is Rs 2.5 lakh in India, Rs 4 lakh in Pakistan, and Rs 5 lakh in Sri Lanka.
The NBR has already submitted its proposal to the finance minister regarding tax-free personal income ceiling at Tk 2.75 lakh. It is now for the political high-ups to take a final decision on the issue.
The sources said the matter would be finalised at a meeting at the Prime Minister’s Office today.
In his budget speech to be placed in Parliament on June 1, finance minister AMA Muhih may propose the hike in the tax-exempted limit.
The finance minister has expressed his desire on several occasions to fix the limit and keep it unchanged for certain years, though the officials concerned have been doubtful about the success of the system in the country where the annual inflation rate is still above 5.5 per cent.

Tax-free income ceiling likely to increase

The government is likely to increase the ceiling for tax- free income from the present Tk 2.50 lakh to Tk 2.75 lakh from the next fiscal year, National Board of Revenue (NBR) sources said. The proposed move comes in the wake of demands from taxpayers and trade bodies for adjusting the threshold with annual inflation and living conditions of the people. Sources said though a significant number of taxpayers might go out of the tax net following theincreased ceiling, the government may take the decision to give them relief as the threshold has remained unchanged for the past two years. The government had last increased the ceiling for tax- free income from Tk 2.20 lakh to Tk 2.50 lakh in FY201415. The government did not raise the ceiling in the past two years in order to widen the tax net, even though the annual average inflation rate rose above 5.6 per cent during that period, trade bodies claimed. The NBR sources said the tax-free ceiling for women, elderly citizens, people with disabilities and freedom fighters will also be hiked. At present, the tax-free income ceiling is Tk 3 lakh for women and senior citizens, Tk 3.75 lakh for people with disabilities, Tk 4 lakh for parents of children with disabilities, and Tk 4.25 lakh for freedom fighters. The amount of minimum income tax, however, may remain unchanged at Tk 5,000, Tk 4,000 and Tk 3,000 for taxpayers living in areas falling under city corporations, districts and upazilas respectively. Trade bodies, including the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), have demanded an increase in the ceiling, considering the rate of annual inflation and overall living standard of people. Earlier, at a pre-budget discussion with the NBR, the FBCCI had demanded fixing the ceiling at Tk 3.25 lakh in the budget, while the Dhaka Chamber of Commerce and Industry wanted it to be Tk 3.50 lakh. In the US, the annual tax free income limit is USD 10,000. It is Rs 2.5 lakh in India, Rs 4 lakh in Pakistan, and Rs 5 lakh in Sri Lanka. The NBR has already submitted its proposal to the finance minister regarding tax-free personal income ceiling at Tk 2.75 lakh. It is now for the political high-ups to take a final decision on the issue. The sources said the matter would be finalised at a meeting at the Prime Ministers Office today. In his budget speech to be placed in Parliament on June 1, finance minister AMA Muhih may propose the hike in the tax-exempted limit. The finance minister has expressed his desire on several occasions to fix the limit and keep it unchanged for certain years, though the officials concerned have been doubtful about the success of the system in the country where the annual inflation rate is still above 5.5 per cent.