The Ministry of Finance has been receiving a plethora of suggestions on the coming budget of 2015-2016. Every year a lot of meetings are held by various trade bodies and think tanks which put forward their suggestions/ observations because they consider those suitable for the county in general and organisations in particular. Most of the suggestions relate to reduction or exemption of taxes on the one hand and demand for increase of budgetary allocation in specific areas on the other.
Among the lot, the claim of the capital market is high. Capital market gurus are against any kind of tax to be imposed upon the capital market instruments, particularly relating to share trading. Some capital market gurus do not stop in demanding exemption only. They expect budgetary allocation for protecting the investors. Globally, there has been a growing concern that the commercial banks should be cautions of investing in risky fields like share trading. Banks are custodians of people's deposits. So, they cannot put people's money at risk. Some of our capital market gurus constantly hammer on commercial banks' involvement with the stock exchange. Presently, there has been a hiccup for drastic reduction of corporate tax for listed companies. Reduction of corporate tax might result in the opening of a floodgate of IPOs.
In Asia the corporate world is still under full control of family sponsors. They decide when to go public judging their own strategies. Bangladesh is no exception. However, the government may accept this proposal and reduce the corporate tax for listed companies. Loss of revenue will not be significant. Rather the case may be different if the number of IPOs rises substantially.
Bangladesh share market has been limping for decades. Twice it tried to jump with disastrous consequences. The share market became golgotha for the innocent investors. Never had the share market been a factor for consideration in preparing the budget in the history of Bangladesh. In the total national investment, the contribution of the IPO market is less than 1 per cent and the money coming from the share trading has hardly anything to do with the mainstream national investment.
The finance minister has said that within a short span of time at least 50 per cent of the citizens will be brought under the tax net. Meanwhile, the parliamentary committee for the ministry of finance has also suggested that tax base shall have to be broadened. There are a lot of professionals-- lawyers, physicians, engineers, architects and consultants who are capable of paying tax. The committee has also proposed that necessary survey should be carried out in ascertaining their incomes. Before taking any such decision, some issues should be sorted out. The government has doubled the salaries of its employees, in order that they are able to raise their standard of living to a reasonably comfortable level. The same consideration should also be applicable to private professionals, before imposing taxes. They should be allowed to enjoy tax exemption to a reasonable extent. The individual tax exemption income should be TK 360,000. There are tax exemptions on health, education, accommodation entertainment etc. The ceilings for all these should be raised. Money spent on purchasing IT equipment should enjoy tax exemption. The tax authorities should provide a reasonable package and then urge these professionals to pay tax. We believe that there would be adequate response because an educated professional will definitely feel proud as a tax payer. Otherwise, if the approach is coercive, there will be unholy alliance between the taxmen and prospective tax payers.
The government feels that even in rural areas there are farmers who earn enough to pay tax. But in assessing their taxable income, sustainability of their income is to be seriously taken into consideration. Agriculture is easy victim of natural vagaries like cyclone, floods etc. Assessment of rules relating to the income of farmers should be flexible. People will feel encouraged to pay taxes if there is good governance and corruption-free administration.
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Wish list before national budget
Syed Mahbubur Rashid | Published: May 15, 2015 00:00:00 | Updated: November 30, 2026 06:01:00
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