The reintroduction of exemption and lower rate of tax on income from fisheries in the new fiscal (2015-16) is likely to benefit the heavyweights, allowing them to sidestep the payment of a substantial amount of tax, revenue officials have said.
The Jatiya Sangsad (national parliament) Monday made the income up to Tk.1.0 million from fisheries tax-free.
The revenue board in September last year lifted the tax-benefit for fish farm owners after allegation of rampant abuse of the facility.
Tax would be imposed at a rate of 5.0 per cent on income above Tk 1.0 million up to Tk 2.0 million. In case of income exceeding Tk 2.0 million, the tax rate will be fixed at 10 per cent.
Tax officials said a separate Statutory Regulatory Order (SRO) will be issued shortly with regard to the fiscal measure for fish farms.
Tax officials said such 'unconditional' tax exemption limit for fisheries income will encourage black money holders to show large amount of earning from other sources in the name of income coming from fish farms.
They said taxpayers may abuse the tax-benefit by splitting their income up to the exemption limit in several tax files of their relatives.
Currently, fish farm income is subject to payment of income tax at regular rates for corporate and individual taxpayers.
Field-level tax officials said they had earlier detected several tax files, where a considerable amount of income was diverted from other sources to fish farms to avail the reduced income tax rate.
The National Board of Revenue (NBR) withdrew the reduced tax benefit on income from fish farms following objection from taxmen. Many well-off taxpayers were seen shifting income from other businesses as fisheries income to enjoy the lower rate of tax.
Dr Syed Aminul Karim, a former income tax policy member, said a big chunk of undisclosed money would be created with the reintroduction of the facility.
He said the government may have moved to reintroduce the controversial tax-benefit by yielding to the pressure from lobbyists.
Officials said income from the fisheries sector cannot be monitored properly as there is no establishment required for farming.
Fish farming can be done in small ditch, ponds, lakes or other water bodies without building any establishment, they said.
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