Finance Minister AMA Muhith proposed Thursday a cut in corporate tax for non-publicly traded company by 2.50 per cent from existing 37.5 per cent.
Rates of taxes for other corporate bodies including banks, non-banking financial institutions, and insurances will remain unchanged, the 2014-15 budget proposal said.
However, the minister proposed to scrap the existing 10 per cent tax rebate facilities for non-listed companies on declaring dividend above 20 per cent.
The budget also proposed a cut in minimum tax of companies, irrespective of loss and profit, to 0.30 per cent from 0.50 per cent.
For bringing discipline on account maintenance system of companies, the Finance Bill-2014 proposed mandatory submission of audited account statements following the Bangladesh Accounting Standard (BAS) and the Bangladesh Financial Reporting Standard (BFRS).
The bill also proposed mandatory submission of audited financial reports by any taxpayer having business turnover above Tk 50 million.
For autonomous bodies, the Finance Bill proposed a reduced tax rate of 25 per cent instead of existing 37.5 per cent.
"Income of autonomous bodies, as per existing provision excluding revenue generated through rendering public services is liable to be taxed at 37.5 per cent. The main objective of the autonomous bodies is not to make mere profit but to provide essential services to the citizens. Considering this issue, I propose to reduce the rate of tax from 37.5 per cent to 25 per cent on income of all autonomous bodies including Dhaka WASA, Chittagong WASA, Khulna WASA, Rajshahi WASA, RAJUK, BTRC and CAAB," the finance minister said.
Considering the views of different trade bodies including the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), the finance minister proposed to reduce deduction rate at source from existing 5.0 per cent to 3.0 per cent on local LC valued at more than Tk 0.5 million. In addition, he proposed not to deduct at source on local letter of credit (LC) of daily necessary consumer items including rice, onion, daal, turmeric, chili, wheat, maize, flour, salt, edible oil, sugar, etc.
Besides, he proposed to reduce tax rate from 5.0 per cent to 3.0 per cent on deemed commissions.
The minister underscored the need for building mutual trust and confidence between taxpayers and tax administration to augment revenue collection.
"To encourage the taxpayers for voluntary compliance, I, therefore, propose to make necessary provision in the existing rules not to select for audit the returns submitted under universal self assessment scheme showing 20 per cent higher income than the latest assessed income subject to fulfilment of certain conditions. There are some complaints of harassment about repeated audit of return of the same taxpayer. I, therefore, propose to select the return of the same taxpayer for audit not more than once in three years unless there is any complaint of irregularities. Same procedure will be applied to selection for audit in VAT returns," the finance minister said.
