Tax ceiling, corporate, SIM taxes likely to remain unchanged

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Doulot Akter Mala
The government is unlikely to change the limit of lowest tax-free ceiling for individual taxpayers, corporate tax rates and SIM tax in the budget for upcoming fiscal in a bid to achieve a revenue target of nearly Tk 720 billion.
The tax threshold will remain same at Tk 165,000 for individual taxpayers while the highest corporate tax rate will be 42.5 per cent and SIM tax at Tk 800 each, according to sources.
The National Board of Revenue (NBR) has kept the taxes unchanged for the fiscal 2010-2011 despite requests from trade bodies and influential people.
Chamber bodies and other large tax paying institutions have requested the NBR to raise the individual tax free ceiling to Tk 2,00,000, cut corporate tax rates and SIM tax.
"The revenue board aims to include 1.0 million new taxpayers by fiscal 2010-11. A number of taxpayers will be dropped from the tax net if the board scales up the tax threshold," said a tax official.
Only 0.7 million people submit tax returns every year against 2.2 million registered taxpayers.
The government had increased individuals tax exemption ceiling to Tk 165,000 from Tk 150,000 in 2008-09. It had also introduced a separate tax ceiling of Tk 180,000 for women and senior citizen.
"So far we know the rates and ceiling will remain same. But it could be changed in the last moment with the recommendation of the government high-ups," the official said.
The government set the lower slab considering price hike, inflation, family size, per capita income, poverty line, saving forecast etc.
Citing examples of tax free slab in India and Pakistan, the official said: "Lower slab of taxable income is Rs 1,00,000 in those countries," the official said.
Existing tax-free ceiling is perfect for the country's current economic condition as living cost and inflation are higher than that of the two neighbouring countries.
Highest rate for individual taxpayer is 25 per cent for annual earnings above Tk 11, 40,000 while lowest is 10 per cent for income above Tk 165,000.
The official said the highest tax rates in India is 30 per cent for an income of Rs 2,50,000 and Pakistan 35 per cent for Rs 7,00,000.
"The country should review the higher slab to increase tax collection from well-off section," he said.