A few changes likely in proposed tax measures

The government may make some changes to the tax measures in the new finance bill before it gets through parliament today (Wednesday), in final consideration of demands from stakeholders.    

Finance Minister AMA Muhith would move the Finance Bill 2016 in the House for passage with such changes, sources said. 

Cut in the proposed tax at source for exporters, upward revision of the investment rebate for individual taxpayers, reduction in VAT amount as a prerequisite for making appeal by aggrieved taxpayers are likely among the changes to be proposed.

Tax at source for readymade garment exporters may be set at 0.80 per cent for fiscal year 2016-17 against the existing 0.60 per cent. In the new budget, the government proposed to increase the rate to 1.5 per cent for exporters. 

Jute exporters are likely to enjoy 0.60 per cent tax at source in the upcoming fiscal year.

However, corporate tax rate for readymade garment exporters will remain unchanged at 20 per cent as per budget proposal made on June 02. Currently, the corporate tax rate for the apparel exporters is 35 per cent.

Ceiling for investment rebate is set to be raised to 25 per cent from the proposed cut-down rate of 20 per cent. Currently, it is 30 per cent.

The provision on imposition of tax at source at a rate of 5.0 per cent on the yields from savings instruments purchased by an approved superannuation fund or pension fund or gratuity fund or a recognised provident fund or workers' profit-participation fund may undergo some changes. 

In the proposed budget, the government has sharply raised the tax amount of the aggrieved taxpayers for filing appeal to 50 per cent from 10 per cent. In the amendment, the rate may be kept unchanged at 10 per cent.

The proposed amount -- a twofold increase from the current rate -- of package VAT for small businesses may remain unchanged despite demands from the traders for a cut. 

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