Minimum tax on cos\\\' gross receipts likely to be cut

The government is likely to cut minimum tax on gross receipts of companies, trim tax rebates for individual taxpayers and bring all state-owned entities under tax net in the budget for fiscal year (FY) 2014-15.

The National Board of Revenue (NBR) is likely to cut the minimum tax for companies to 0.25 per cent from existing 0.50 per cent on the total assessed turnover or gross receipt.

The Board also may slap income tax at 25 per cent on local authorities of the government. Currently, many of the SoEs including the Bangladesh Telecom Regulatory Commission (BTRC) and the Civil Aviation Authority (CAA) are enjoying tax exemption as per their respective laws.

Income tax might be imposed at 25 per cent on annual income of all local authorities. Officials eye a significant amount of revenue from the SoEs following a sharp increase of their income.

Cut in minimum tax on gross receipts of companies is a long-cherished demand of businesses and chamber bodies. Companies have to pay the tax irrespective of their loss and profit. Businesses have termed the law as violation of principle of income tax law.

On the contrary, income tax officials said the law has been framed after the taxmen found majority of the registered companies showing loss for years concealing actual accounts. Many countries across the world have such minimum tax. A company cannot operate for long as a losing concern, officials said.

They said the tax measure helped the government collect a considerable amount of revenue from the companies.

Tax rebates for individual taxpayers are now 15 per cent on investment. Currently, taxpayers who pay income tax at 10 per cent slab are claiming rebates on their paid tax due to higher rebate system that has been allowed in FY 2013-14.  Sources concerned said the tax rebates will be rationalised in the upcoming budget.

Sources said income tax may be imposed at 10 per cent on income of Micro Finance Institutions (MFIs). The NBR may also make mandatory bank transaction of house rent above Tk 25,000.

Green tax may also be imposed at 1.0 per cent on companies operating without Effluent Treatment Plant (ETP) and polluting environment.

Areas of advance income tax (AIT) or withholding tax might be increased to some existing sector. AIT contributes some 51 per cent of aggregate income tax collection of NBR.  

Officials said the income tax measures for the upcoming FY are set to be framed by cutting areas of exemption and waiver as the wing will have to collect highest amount of revenue among the three wings.

End/mala  

Cut in minimum tax on gross receipts of companies is a long-cherished demand of businesses and chamber bodies. Companies have to pay the tax irrespective of their loss and profit. Businesses have termed the law as violation of principle of income tax law.

On the contrary, income tax officials said the law has been framed after the taxmen found majority of the registered companies showing loss for years concealing actual accounts. Many countries across the world have such minimum tax. A company cannot operate for long as a losing concern, officials said.

They said the tax measure helped the government collect a considerable amount of revenue from the companies.

Tax rebates for individual taxpayers are now 15 per cent on investment. Currently, taxpayers who pay income tax at 10 per cent slab are claiming rebates on their paid tax due to higher rebate system that has been allowed in FY 2013-14.  Sources concerned said the tax rebates will be rationalised in the upcoming budget.

Sources said income tax may be imposed at 10 per cent on income of Micro Finance Institutions (MFIs). The NBR may also make mandatory bank transaction of house rent above Tk 25,000.

Green tax may also be imposed at 1.0 per cent on companies operating without Effluent Treatment Plant (ETP) and polluting environment.

Areas of advance income tax (AIT) or withholding tax might be increased to some existing sector. AIT contributes some 51 per cent of aggregate income tax collection of NBR.  

Officials said the income tax measures for the upcoming FY are set to be framed by cutting areas of exemption and waiver as the wing will have to collect highest amount of revenue among the three wings.