More than a dozen tax measures are set to be proposed in the upcoming national budget to attract investment in renewable energy, edible-oil production and small and medium enterprises (SMEs), while broadening the country's tax base.
Under the proposed measures, companies engaged in solar power generation and supply may enjoy a full income-tax exemption on earnings from such investments until June 2035, according to official sources.
To encourage the use of solar energy, the government is also likely to offer a tax rebate equivalent to 5.0 per cent of electricity bills paid by consumers using solar power.
The budget is expected to propose a reduced advance tax on electric vehicles (EVs), with rates ranging from Tk 25,000 for vehicles up to 200 kilowatts (kW), Tk 50,000 for those above 200-300 kW, Tk 75,000 for 300-400 kW, and Tk 100,000 for vehicles exceeding 400 kW.
Finance Minister Amir Khosru Mahmud Chowdhury is scheduled to place the budget proposals before the parliament on June 11.
Investors in edible oil production using locally sourced oilseeds are expected to enjoy a 10-year tax holiday until 2035.
The budget may also include special support measures for women, youth, persons with disabilities and innovative entrepreneurs.
As part of efforts to expand the tax net, obtaining a Taxpayer Identification Number (TIN) may become mandatory for opening bank accounts.
However, student accounts, no-frills accounts and persons exempted through gazette notifications would remain outside the requirement.
A major data integration initiative is also expected to be announced to link taxpayer information across various government and private entities.
Data from the National Board of Revenue (NBR), the Election Commission, banks, utility service providers, sub-registrar offices and other institutions would be integrated into a centralised system.
With withholding tax becoming a major source of government revenue, the NBR is likely to introduce a Withholders Identification Number (WIN) to improve compliance and accountability.
In line with the government's commitment to fiscal deregulation, a series of measures aimed at facilitating the flow of money and easing tax compliance are expected.
Corporate tax return filing is likely to be digitised, while tax return submission through mobile applications may be introduced.
The budget may also provide incentives for early tax return submission and impose penalties for delayed filing.
Taxpayers would be allowed to submit returns voluntarily after the deadline by paying Tk 5,000 or 10 per cent of the tax payable, whichever is higher.
The tax authority is also expected to allow accrual-based deduction of interest expenses and significantly increase allowable limits for perquisites, entertainment expenses, free samples and promotional expenditures.
A new advance tax of 0.20 per cent on supplies made to retailers may be proposed through the Finance Bill.
From the next fiscal year, owners of motorcycles with engine capacities of 150cc and above may be required to have a TIN to register their vehicles.
Source tax rates on around 60 essential commodities, including paddy, rice, wheat, sugar, potatoes, cattle, poultry, fish, onions, garlic, ginger, salt, edible oil and oilseeds, may be reduced on local procurement.
Source tax on power purchases, export cash incentives, fuel supplied by refineries, gold jewellery, locally manufactured mobile phone handsets and mobile network services is also likely to be reduced.
SME entrepreneurs may enjoy tax-free income on annual turnover of up to Tk 5.0 million. The threshold would be Tk 7.0 million for women entrepreneurs and entrepreneurs with disabilities.
Start-ups, innovative ventures and technology-based businesses are expected to receive a nine-year exemption from turnover tax.
To encourage investment by youth, women, persons with disabilities and innovative entrepreneurs, the government may introduce accelerated depreciation benefits on machinery and physical infrastructure established outside Dhaka and Chattogram.
Eligible businesses would be allowed 60 per cent depreciation in the first year and 40 per cent in the second year.
The budget may also propose a three-percentage-point reduction in advance tax on the import of computer printers, portable automatic data-processing machines, flash memory devices and computer monitors to support the growth of the ICT sector.
Additional tax benefits for non-residents in areas such as machinery rental payments, insurance premiums and interest payments may also be offered in the budget.
The government is further expected to introduce a new framework for recognising the 67 highest taxpayers under different categories.
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