Businesses, fixed income people for hike in tax-exemption ceiling
FE Reports | Wednesday, 4 June 2008
Businesses and fixed income group of people do strongly favour an upward revision of tax exemption ceiling from the existing rate of Tk 150000 in view of the substantial rise in the cost of living index.
In the last one year, the fixed income group of people were the worst affected because of the soaring price of essential commodities, hike in house rent and cost of transportation.
The point-to-point food inflation has hit a record high of over 15 per cent while annual average inflation is estimated at 10 per cent.
The government officials concerned recently hinted at keeping the tax exemption ceiling unchanged in the upcoming fiscal.
"Real income of the people has declined due to high inflation. Specially the fixed income group of people is bearing the brunt of high inflation," said noted economist Zaid Bakht of the Bangladesh Institute of Development Studies (BIDS).
There must be some arrangements to help the fixed income group of people. An increase in tax threshold could be one of such steps, Bakht said.
Businessmen can make adjustment with the higher rate of inflation by increasing their profit limit, but fixed income group of people cannot since they have no means to do that, he added.
"There must be some arrangements for fixed income group of people to help them keep the real income at the same level by making adjustment with the high inflation rate," he said.
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) in its budget proposal also urged the government to increase the existing tax threshold to Tk 250000 from the existing one of Tk 150000.
Talking to the FE, FBCCI president Annisul Huq said: "The government should set tax-exemption limit for individual taxpayer at least at Tk 200,000 considering high cost of living.
Upward adjustment of tax ceiling is necessary to help the people cope with the soaring prices of essentials, he said.
The apex chamber body also proposed separate tax ceiling for women and senior citizens , he added.
Jalal Ahmed, Principal Officer of Al-Arafah Bank, said: "We, the fixed income group of people, are expecting that the government would raise the tax threshold considering high prices of essential commodities."
The value of Tk 150000 last year is not the same this year as the real income has declined significantly because of high inflation rate, he said.
It should be at Tk 200,000 for the upcoming fiscal to offset loss of the rising commodity prices, he said.
"The government has been raising tax-exemption ceiling during the last few years, so it is our natural expectation that the threshold will be raised," Ahmed added.
There are four tax thresholds--- above Tk 150,000 to Tk 275,000, up to Tk 325,000, up to Tk 3,75,000 and beyond Tk 3,75,000 with tax rates 10, 15, 20 and 25 per cent.
A taxpayer has to pay minimum Tk 2000 tax for income above Tk 150,000.
In the last one year, the fixed income group of people were the worst affected because of the soaring price of essential commodities, hike in house rent and cost of transportation.
The point-to-point food inflation has hit a record high of over 15 per cent while annual average inflation is estimated at 10 per cent.
The government officials concerned recently hinted at keeping the tax exemption ceiling unchanged in the upcoming fiscal.
"Real income of the people has declined due to high inflation. Specially the fixed income group of people is bearing the brunt of high inflation," said noted economist Zaid Bakht of the Bangladesh Institute of Development Studies (BIDS).
There must be some arrangements to help the fixed income group of people. An increase in tax threshold could be one of such steps, Bakht said.
Businessmen can make adjustment with the higher rate of inflation by increasing their profit limit, but fixed income group of people cannot since they have no means to do that, he added.
"There must be some arrangements for fixed income group of people to help them keep the real income at the same level by making adjustment with the high inflation rate," he said.
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) in its budget proposal also urged the government to increase the existing tax threshold to Tk 250000 from the existing one of Tk 150000.
Talking to the FE, FBCCI president Annisul Huq said: "The government should set tax-exemption limit for individual taxpayer at least at Tk 200,000 considering high cost of living.
Upward adjustment of tax ceiling is necessary to help the people cope with the soaring prices of essentials, he said.
The apex chamber body also proposed separate tax ceiling for women and senior citizens , he added.
Jalal Ahmed, Principal Officer of Al-Arafah Bank, said: "We, the fixed income group of people, are expecting that the government would raise the tax threshold considering high prices of essential commodities."
The value of Tk 150000 last year is not the same this year as the real income has declined significantly because of high inflation rate, he said.
It should be at Tk 200,000 for the upcoming fiscal to offset loss of the rising commodity prices, he said.
"The government has been raising tax-exemption ceiling during the last few years, so it is our natural expectation that the threshold will be raised," Ahmed added.
There are four tax thresholds--- above Tk 150,000 to Tk 275,000, up to Tk 325,000, up to Tk 3,75,000 and beyond Tk 3,75,000 with tax rates 10, 15, 20 and 25 per cent.
A taxpayer has to pay minimum Tk 2000 tax for income above Tk 150,000.