The government is going to raise the tax-free-income ceiling for individuals in the forthcoming budget for inflation relief amid higher cost of living, besides few other fiscal revisions including amnesty on ‘black money’.
Sources concerned said the ceiling might be increased to Tk 330,000 to Tk 350,000 for an individual taxpayer.
Currently, the tax threshold for individuals is Tk 0.3 million. It means an individual have to pay tax if their income crosses Tk 25,000 per month.
The limit to income sans tax would go up for all types of taxpayers—women, senior citizens, physically challenged, the third gender, and war-wounded freedom fighters, they said about one of the changes in fiscal measures in the new budget.
Meanwhile, the tax-free-income ceiling remained unchanged during the three consecutive fiscal years although there had been pleas for raising the threshold considerably in the context of global and local financial woes for steep inflation.
In the fiscal year 2020-21, the government increased the tax ceiling to Tk 0.3 million from Tk 250,000 after five years.
In the budget for FY2023-24, the government may also withdraw all sorts of special facility that allows ‘whitening black money’ without question.
The tax special facility was mainly meant for repatriation of huge sums of money reportedly siphoned off the country. And the change of mind of policymakers comes following lukewarm response.
“None of the persons (black-money holders) did respond to the offshore tax-amnesty provision” in the current fiscal, sources in the know said.
Official sources said the decisions were made by a high-powered body of the government recently.
“However, there might be changes anytime before budget if policymakers so desire,” says one official.
The National Board of Revenue (NBR) has found such measures ineffective to bringi any result while it evoked huge criticism, said one official of the Ministry of Finance.
“There would be no special tax amnesty to declare undisclosed income in the upcoming budget as per decisions taken until now,” he adds.
However, the permanent provisions like ‘voluntary disclosure of income’ by paying higher taxes or declaring money by facing questions may stay in the budget.
On the black-money-whitening facilities, there would be no extensions of the special schemes for FY24.
In the current budget, the government has offered a new scheme to bring back offshore money by paying a nominal amount of taxes.
The first-of-its-kind fiscal measure failed to attract any taxpayer rather sparked flurries of criticism as an “injustice” to regular taxpayers.
Officials said fiscal measures would be devised to give some relief to the common people amid high inflationary pressure that pushed the barometer reading to 9.33 per cent in March by official count.
The official said though some marginal taxpayers drop out from the tax net with the upward revision of tax threshold, the government may offer the relaxation in addressing the inflationary pressure on low-and fixed-income groups of people.
According to a study by the Center for Policy Dialogue (CPD) household expenditure of a four-member family in the city had increased by 25 per cent in one year due to surge in commodity prices.
The CPD proposed that the tax-free limit be lifted to Tk 350,000 in the upcoming budget to offset the shocks.
In the pre-budget proposals, stakeholders, chamber bodies and economists have proposed that the government consider upward revision of the tax ceiling for the individual taxpayers to give some relief in this situation.
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) proposed that the ceiling be revised up to Tk 0.4 million while Dhaka Chamber of Commerce and Industry (DCCI) proposed Tk 0.5 million.
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