The government is likely to impose tax on gratuity receipt, on amounts above Tk.25 million, of an individual salaried person for the first time from the next fiscal year (FY).
There will be no tax on gratuity receipts up to 25 million of an individual taxpayer.
Sources concerned said an individual taxpayer would be required to pay income tax at regular rate for the amount above Tk. 25 million.
Explaining the reasons behind proposing the fiscal measure, they said there are some high-salaried private sector officials who receive a considerable amount as gratuity that is currently tax-free.
The government has made the move to collect income tax on the receipt of gratuity fund if it exceeds a certain limit, they added.
Gratuity is the scheme designed to benefit the employees of the public sector autonomous and semi-autonomous bodies and private sector entities.
The scheme encourages and motivates people to serve the same employer for longer duration. Anybody who has served an organization for more than 3-5 years is eligible for gratuity. A portion or basic pay of last drawn salary is multiplied with the number of years of service and paid out to the officials when he/she leaves an organization.
Former income tax member Aminur Rahman, however, expressed his concern over the move as the gratuity fund has been designed mainly to support retired persons and senior citizens.
"According to the income tax law, taxmen cannot impose tax on income of more than 12 months of taxpayers, except capital gain," he said.
Mr Rahman suggested imposition of tax on incremental amount of gratuity fund, not on accumulated monthly basic pay.
Income tax subcommittee convener of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Humayun Kabir FCA also reiterated the same saying 'the government cannot impose tax on capital receipt according to the principle of income tax law.
"The necessity on increasing tax-revenue collection sometimes forces the government to frame tax-measures beyond the rules," he maintained.
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