The last-minute amendments made to two major tax proposals in the national budget is likely to deprive the government of revenue estimated at Tk 22 billion during the fiscal year (FY) 2015-16.
Tax at source (TAS) on export bill and advance income tax (AIT) on import of essential commodities are two of the vital sources of revenue collection by the tax authorities.
Finance Minister AMA Muhith had proposed hike in rates of both the sources of tax in the budget for the FY'16. But following opposition from the businesses he had to amend the tax proposals, lowering the proposed rates.
The National Board of Revenue (NBR) had projected additional revenue earning of Tk 20 billion due to the increase in the tax at source on export earning and Tk 12 billion from imports.
In the process of passing the new budget, parliament endorsed the lowering of the tax on export to 0.6 per cent from 1.0 per cent proposed originally and also withdrawal of the proposed 2.0 per cent tax on essential products.
Officials said a major part of the targeted income-tax collection was based on these measures. The taxmen will have to offset the loss of revenue through improved enforcement and monitoring.
The target for income-tax collection has been set at Tk 659.32 billion, expecting 30 per cent growth in the current fiscal over that of the corresponding period.
According to the projections by income-tax wing of the NBR, upward revision of the minimum tax for individual taxpayers will help mobilise Tk 1.0 billion in revenue while increasing tax for non-listed cigarette companies Tk 500 million, tax on cooperative society Tk 50 million, penalty for false audit report Tk 1.0 billion, newly imposed tax on festival allowances of government officials Tk 2.0 billion, workers' participation fund Tk 100 million, at-source tax on cigarette companies Tk 3.0 billion, house-purchase commission Tk 100 million and real- estate companies Tk 100 million.
However, the collectors count a loss of Tk 300 million owing to upward revision of the ceiling of tax-free income for individual taxpayers to Tk 250,000.
Another chunk of Tk 3.50 billion is feared to be lost through the lowering of corporate income tax for listed and new commercial banks, non-banking financial and insurance companies.
The income-tax wing in a strategy paper has estimated Tk 40.37 billion additional revenue through amendments and revision of fiscal measures in 2015-16 compared to that of previous year.
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