Dhaka, June 11: Finance Minister AHM Mustafa Kamal is planning to increase the threshold of tax-free income for individuals to Tk 300,000 in the national budget for fiscal 2020-21.The proposal outlined in the Tk 5.68 trillion budget tabled on Thursday aims to raise the ceiling by Tk 50,000 per annum owing the slump in personal income brought about by the coronavirus epidemic, according to the finance minister.
The government had previously raised the ceiling to Tk 250,000 from Tk 220,000 in fiscal 2015-16.
“The unchanged status of the tax-exempted income threshold on the one hand, and the loss of real income due to inflation on the other have created a feeling of discomfort among the genuine and valued taxpayers with regard to payment of taxes,” Kamal said while noting the financial impact of the COVID-19 pandemic on tax-payers.
At the same time, the finance minister proposed raising the tax-free income threshold for women and taxpayers above 65 years of age to Tk 350,000 from Tk 300,000.
He also suggested lowering the minumum income tax rate for indivuals to 5 percent alongside reducing the maximum rate to 25 percent per annum.
“This reduction of tax burden will hopefully add some comfort to the lives of the individual taxpayers, and will also make them feel encouraged to pay taxes regularly.”
It came amid calls from several organisations, including the Federation of Bangladesh Chambers of Commerce & Industries or FBCCI, to lift the tax-free income limit which remained unchanged at Tk 250,000 for the last four years.
FBBCI had recommended increasing the limit to Tk 350,000 in light of the rise in living costs and inflation rate.